Archer Daniels Midland Company (ADM) has reached an agreement to acquire Rodelle Inc., a premium originator, processor and supplier of vanilla products. The acquisition will see ADM's vanilla capabilities expand and it also includes an equity stake in farmer cooperative in Madagascar, part of the most extensive vertically integrated supply chain in the vanilla industry. Financial details of the deal have not been disclosed and ADM anticipates the transaction, which is subject to regulatory approval, will be completed in the third quarter.
Rodelle, founded in 1936 and based in Fort Collins, Colorado, originates, processes and sells premium vanilla ingredients and products, including organic and traditional extracts, beans, alcohol-free flavors and pastes. The company also sells non-vanilla products, including flavorings, extracts, spice blends and organic spices. Rodelle provides ingredient solutions to food and beverage makers, as well as directly to consumers, with a premium retail brand that can be found in the baking aisle of most grocery stores in North America. The company’s sales last year were approximately US$40 million.
Rodelle’s supply chain is unique among major vanilla processors. In Madagascar, the company owns a stake in Federation Sahanala Vanille – a joint venture between Rodelle and a partnership of local associations that now includes more than 2,100 registered vanilla farmers – and is capable of producing industry-leading volumes of certified organic vanilla. Rodelle also has a strategic partnership with Gourmet Gardens, providing sourcing of vanilla in Uganda. By removing the third parties that are typical in other vanilla processor supply chains, Rodelle is able to offer competitive pricing and a reliable supply.
“With the acquisition of Rodelle, we are continuing to grow our value chain by enhancing what is already one of the most comprehensive portfolios in the flavor industry,” says Scott Olstad, President of ADM’s North American WILD Flavors business.
“Not only is vanilla one of the most popular and enduring flavors, but Rodelle’s integrated supply chain will allow us to offer an unparalleled range of certified organic and natural vanilla ingredients for today’s health-conscious consumers. The addition of Rodelle will give us immediate capabilities in both the retail and commercial vanilla markets, and we see significant opportunities to expand the business. We’re looking forward to working with the great Rodelle team to help build on their impressive success,” he explains.
An ADM spokesperson tells FoodIngredientsFirst: “We’re not disclosing that information for this transaction. However, this is similar to other bolt-on acquisitions we’ve made in our Nutrition business.”
“Vanilla is one of the most popular flavors, and with this acquisition, ADM will be adding a wide range of vanilla capabilities to our already extensive nutrition portfolio. Currently, we source our vanilla flavoring from third parties, including Rodelle. Consumers today don’t just want a great taste – they want foods that fit their health-conscious lifestyles, and are produced sustainably. Because of Rodelle’s unique supplier relationships, adding it will allow ADM to offer its customers industry-leading certified-organic vanilla products.”
“The total annual global consumption of vanilla beans is estimated to be about 2,000MT. North America consumes more than half of that volume every year. Between 2013 and 2017, global new product launches with vanilla extract as an ingredient has increased by 40 percent. During that same period, launches with ‘Bourbon Vanilla Extract’ have more than doubled. Leveraging Rodelle’s vanilla traceability and sustainability programs already in place, ADM will be able to provide flavor solutions with highly desired region-specific claims to help our customers differentiate their products,” explains the spokesperson.
“We were far more subject to the whims of the vanilla market when we were buying from third-party suppliers. One of the advantages of Rodelle’s unique vertically integrated supply chain is that removes several layers of third parties that are typical in the industry, reducing costs and offering more control.”
“This acquisition represents another important step in our strategy to create shareholder value,” notes Vince Macciocchi, ADM’s Senior Vice President and President, Nutrition.
“Rodelle will be a key part of our integrated human and animal Nutrition business – a business that we are focused on growing. Earlier this summer, we announced two important additions to our Nutrition business unit: Neovia, a global leader in value-added animal nutrition products, and Probiotics International Limited, a UK-based provider of probiotic supplements for human, pet and production animal use. With these and other transactions, we are strengthening our position as the go-to provider for nutrition customers around the globe, and we are excited about the benefits for customers and shareholders alike,” he says.
“We look forward to joining the ADM team and contributing Rodelle’s expertise in vanilla products to another well-established flavoring industry company,” explains Joe Basta, Rodelle Co-founder. “The Rodelle brand and our loyal customers will benefit greatly from ADM’s technical expertise and commercial capabilities. The core of our business will remain unchanged, and our customers can expect the high-quality vanilla and baking ingredients they have relied on for over 80 years.”
“We see a natural synergy between Rodelle’s vertically integrated supply chain that brings consumers closer to vanilla farmers and ADM’s global reach and technical expertise in the flavor and food ingredient industry,” adds Rodelle Co-founder, Dan Berlin. “In joining forces with ADM, Rodelle will be able to leverage even more value for our customers, employees, farmers and shareholders.”
Source: www.foodingredientsfirst.com
