Fleury Michon is undergoing a strategic realignment of its activities. The company is selling its meal trays division to Kumo. This strategic move by the French food giant follows a redefinition of its offering in the wake of the pandemic. Here is an explanation and analysis from the experts at AURIS Finance, a consultancy specialising in mergers and acquisitions.
With sales of €13 million, Fleury Michon’s meal trays business represented just 2% of the group’s total turnover. The food giant has decided to divest this business and has just announced that it has signed an agreement to sell it to Kumo, a specialist in ultra-fresh products for supermarkets and caterers. The sale includes the marketing and production activities, as well as the industrial assets dedicated to corporate meal trays. It is anticipated that the transactions will be concluded by the end of 2024. The deal is subject to the usual conditions precedent being lifted. Kumo’s core expertise lies in ultra-fresh products tailored to meet the demands of mass retail and catering sectors. This acquisition will enable the company to strengthen its presence in the ready-to-eat meals segment.
A strategic realignment
Fleury Michon group is France’s leading producer and retailer of delicatessen products, with 90% of its sales generated in France. The group, which is listed on the stock exchange, announced a turnover of €836 million for 2023, representing a 5% increase compared to the previous year. In the supermarket sector, Fleury Michon is the dominant player in the cold meats and ready meals market, with competitors including Herta and Aoste. As stated in the group’s annual report, its products are consumed by 77.9% of French households, representing a high level of penetration among French consumers. The company sells 351 million products a year.
A mature market
It was in the wake of the pandemic that the food giant redefined its strategy. During this period, sales of meal trays to airlines declined significantly, with a 74% reduction in the third quarter of 2020. Conversely, sales in supermarkets increased significantly, by 14%. The sale of meal trays to businesses plummeted as a result of the introduction of home-working schemes and travel restrictions. As part of its Ambitions 2025 strategic plan, the group is now focusing on more profitable segments with the aim of achieving long-term growth. The group’s core activities are centred around three main product lines: cold meats, ready-made meals, and services associated with more responsible eating.
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This transaction is illustrative of a robust sectoral trend: major food companies are currently streamlining their portfolios in a mature market. The sale of Fleury Michon’s meal trays division allows the company to reinforce its presence in its preferred sectors, while Kumo is able to consolidate its position in ultra-fresh foods and catering. At AURIS Finance, a team of experts specialises in providing guidance and support within the mass retailing and agri-food sectors. We can assist you in developing a long-term strategy for your business, including identifying potential targets, securing financing, and planning an exit strategy.
