REGINA, SASKATCHEWAN, MISSION, KAN., and CHESTER, MONT. — Above Food Ingredients, a food ingredient company leveraging a vertically integrated supply chain, announced Aug. 9 its plans to acquire The Redwood Group’s (TRG) Specialty Crop Food Ingredient division for $34 million. The division supplies high-quality grains, pulses and specialty crops to customers in the human and pet nutrition industries. 

TRG’s Specialty Crop Food Ingredient division operates a vertically integrated model, spanning from farm to consumer and encompassing origination, merchandising, processing and value-added finishing of ingredients. According to Above Food, this vertical integration allows Specialty Crop Food Ingredient division to achieve higher margins and differentiates it from commoditized food and ingredient suppliers. Additionally, the division achieved revenue of $164 million in the fiscal year ended Dec. 31, 2023, and average adjusted EBITDA for the division in 2021, 2022 and 2023 was $5.3 million.

In acquiring TRG’s Specialty Crop Food Ingredient division, Above Food will expand its penetration in the North American market with an emphasis on pet food, as pet food represents about 40% of the division’s sales. The division is well-positioned to benefit from increased consumer demand for plant-based pet and human food offerings.

“This acquisition marks a major milestone for Above Food and strengthens our international footprint as our first US physical facilities while also significantly growing our market share of the high-growth pet food category,” said Lionel Kambeitz, founder, president, chief executive officer, and executive chairman of Above Food. “TRG’s Specialty Crop Food Ingredient division operates in full harmony with our ‘Seed-to-Fork’ approach, providing us with top-tier processing and storage assets supported by end-to-end quality assurance, product development and safety protocols, while bringing strong relationships with growers, suppliers and customers.

“It is a complete business with origination partners that are similarly utilizing sustainable farming practices that are consistent with our Canadian growers, which establishes broader reach across North America that we can leverage for the benefit of our shareholders,” he added.

Above Food’s Seed-to-Fork approach is central to its positioning. It provides the company with control over its entire supply chain, ensuring quality, sustainability, safety and traceability standards, while also aligning with its commitment to regenerative agriculture. 

Specialty Crop Food Ingredient division is expected to advance Above Food’s direct customer relationships and enhance its value-added capabilities, helping drive margin optimization. The division is set to provide an exclusive, diverse and long-standing supplier network, which will assist Above Food with mitigation of risk around localized crop conditions and the establishment of a unique supply chain. It will also provide Above Food with organic growth opportunities, including the potential to drive scale. 

Additionally, Specialty Crop Food Ingredient division offers a portfolio of owned facilities and third-party facilities under exclusive, long-term and renewable contracts. According to Above Foods, this offers a benefit of outright ownership and flexibility without the burden of capital expenditure, maintenance costs and operational staffing. 

“The sale of our Specialty Crop Food Ingredient division represents a significant milestone in The Redwood Group’s growth,” said Mike Kincaid, founder and president of TRG. “This is a bittersweet moment in our history, yet represents a tremendous opportunity for personal and professional growth for our teams in Mission, Kan., and Chester, Mont., to join an organization principally focused on specialty crops and value-add opportunities in the region as well as globally. 

“Above Food is adding a well-led group of hardworking innovators, who I expect to continue flourishing and immediately improve utilization and expand the margin structure of several of Above Food’s assets,” he added. “We are grateful for our team of people who helped build this business and are thankful for the Above Food team’s thoughtful approach to this acquisition.”

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