Grocerant niche Ready-2-Eat and
Heat-N-Eat prepared food offerings have as regular readers of this blog have
known have been growing since the early 1990’s and now are the key drives of
growth in every sector of food retail today according to Steven Johnson, Grocerant
Guru® at Tacoma, WA based Foodservice
Johnson, is not the only one
paying attention to disruption within the retail food sector driven by customer
migration from brands not proving what customers want to those focused on
grocerant niche Ready-2-Eat and Heat-N-Eat food.
That’s right, you guessed it, Parkland Corp. understands those customer
migration patterns as well, and that is why they are going to will acquire
Mississauga, Ontario-based M&M Food
Market, a premium, restaurant-quality frozen food retailer.
Now here is a company doing all the right
things, starting with looking a customer ahead. The deal represents one of
multiple steps Parkland is taking in
its retail diversification strategy to
expand its proprietary food offer, customer reach and its own food innovation
Ian White, senior vice president of strategic marketing and innovation, stated,
"This acquisition provides a platform to grow our food offer, expand our
proprietary brands, and advance our digital and loyalty strategy," …
"Consistent with our commitment to create convenience destinations, M&M's national store network, and
innovative approach to food preparation and menu development positions us to
offer high-quality food that complements our growing quick-serve restaurant
White continued, "We will grow these
capabilities in all our operating regions and bolster our digital connection to
customers by combining M&M and Journie rewards programs,"…. "We
look forward to bringing On the Run and M&M
together to help customers make the most of every stop."
The acquisition includes more than 300
standalone franchise and corporate owned stores; 2,000-plus M&M new
non-traditional Express locations; and a well-established rewards program with
approximately 2 million active members.
So, it’s this simple, M&M will create quality food
options that Parkland customers can consume fresh-from-frozen, both on site and
on the go, and prepared from frozen at home, the company said. Parkland plans
to leverage these capabilities throughout its existing network and
soon-to-be-launched standalone On the Run convenience stores.
Andy O'Brien, CEO of M&M, stated, "Parkland's On the Run brand is a
convenience retail leader and we are excited to combine our two
offerings," ... "M&M and its franchise partners share Parkland's
customer focus and passion for quality food. The combination of our innovative
food capabilities and Parkland's more than 3,000 retail locations in 25
countries creates an immediate runway of growth and expansion
Here is how they are looking a customer
ahead, as the acquisition enables key elements of Parkland's diversification
Advancing its enterprise food
strategy: The deal adds a proprietary brand,
experienced team, franchisee network and a scalable fresh and fresh-from-frozen
food growth platform across all markets. Parkland will leverage M&M's
expertise and track record of developing successful menus in its innovation
kitchen to evaluate and develop additional fresh and quick-serve food choices
across its network.
Advancing its digital
strategy and creating a premier Canadian
loyalty program: By combining Journie and M&M's reward programs,
Parkland will create extensive cross-promotional opportunities and form one of
Canada's premier loyalty programs.
Enhancing its On the
Run customer value proposition: M&M
will be integral to growing the On the Run network, bolstering Parkland's
in-store, e-commerce and home delivery offers, and supporting its standalone
Capital-light: M&M leverages a well-established, highly efficient food
preparation and distribution network, requiring limited capital investment to
efficiently serve its retail locations.
Ratable cash flow with
significant growth potential: M&M's
royalty fee-based operating model creates a ratable stream of cash flow.
Parkland aims to grow M&M's Canadian annual run rate adjusted EBITDA to
approximately $55 million in three years.
Total consideration for the transaction
is approximately $322 million, which will be funded out of existing credit
facility capacity. Subject to approval under the Competition Act (Canada) and
other customary closing conditions, the acquisition is expected to close in the
first quarter of 2022. How are you looking a customer ahead?
you looking for a new partnership to drive sales? Are you ready for some fresh
ideations? Do your food marketing tactics look more like yesterday that
tomorrow? Visit GrocerantGuru.com for more information
or contact: Steve@FoodserviceSolutions.us Remember success
does leave clues and we just may have the clue you need to propel your