The J. M. Smucker Co. has acquired privately held Rowland Coffee Roasters Inc., which makes RTD cold coffee Bustelo Cool and Bustelo Cool Cafe Mocha.
J. M. Smucker acquired the Miami-based coffee company, which also makes leading Hispanic brands Cafe Bustelo and Cafe Pilon, for $360 million. Bustelo products are particularly popular in Florida and the Northeastern U.S., generating sales of more than $110 million last year, according to Smucker’s.
Over the past three years, with the introduction of Bustelo Cool, the company had attempted to extend the brand into an RTD format with some success — as a cold, sweet treat, the 8.3 oz. brightly colored yellow can had made inroads in New York and Miami, both among ethnic enclaves and young, influential consumers.
“This acquisition strengthens and broadens the breadth of our leadership in the U.S. retail coffee category,” said Richard Smucker, Executive Chairman and Co-Chief Executive Officer. “The addition of the Cafe Bustelo and Cafe Pilon coffee brands, each with a rich heritage, provides us with a unique opportunity to establish a strong presence in coffee with Hispanic consumers in the U.S.”
“This is an exciting bolt-on transaction and a good strategic fit for our Company,” said Vince Byrd, President and Chief Operating Officer. “The acquisition is expected to be accretive in fiscal 2012, and provides our coffee business with greater scale and reach. Our proven ability to leverage our existing infrastructure will provide additional growth opportunities for these trusted brands.”
The deal will allow J.M. Smucker to expand the marketing and distribution footprint for Rowland brands while eventually bringing its Florida-based manufacturing operations to an existing facility in New Orleans, La.It was not immediately clear what the new owners plan to do with Rowland’s existing manufacturing facility.
J.M. Smucker, which makes foods such as Crisco and its namesake spreads and beverages such as Folgers and Dunkin Donuts coffee, said the acquisition strengthens and broadens its U.S. retail coffee business. The company completed the deal with cash-on-hand and borrowings under an existing credit facility.
According to Brian Feit, a branding consultant who helped develop Bustelo Cool, the product line extension helped raise the company profile as it was responsible for extra media attention being drawn to the larger entity.
“I think we did too good of a job putting [the brand] on the map,” said Feit.