Wessanen to Sell Dairy Unit, Focus on Health Foods

ST. AUGUSTINE, Fla.—Dutch food group Koninklijke Wessanen, owner of specialty foods distributors Gourmet Awards Foods and Tree of Life, based here, on Oct. 17 announced its intentions to sell its U.S. and European dairy units to focus on the health market.

Wessanen says it is refocusing on the health category due to its high-growth potential. Its European-based, health foods distributor Distriborg and Tree of Life operations generate annual sales of more than $1.7 billion, the company says, while its worldwide dairy operations contributed roughly $1 billion in 1999.

Analysts say that limited growth prospects and traditionally thin margins in dairy might be driving the company’s decision.

“We believe we have a leading edge in [this] fast-growing market, thanks to our … in-depth knowledge of the health- and quality-conscious consumer,” said Wessanen Chairman Mac Zondervan in a company press release. “The divestiture of the dairy businesses will strengthen Wessanen’s strategic focus and will enable further expansion in the health and wellness market.”

Potential acquisition targets in the natural products industry have not been revealed.

The fourth largest dairy producer in the U.S., Wessanen’s American dairy companies include Minneapolis-based Marigold Foods, and Crowley Foods in Binghamton, N.Y.

According to Reuters, Wessanen won’t say how much it would like to receive for its dairy operations. However, the news service cited a Dutch analyst who estimated proceeds to come in at about $595.2 million.