TreeHouse Foods buys private label tea business for $205M

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Dive Brief:

• TreeHouse Foods is buying the private brand tea business of Harris Freeman & Co (Harris Tea) for about $205 million. 
• The acquisition includes Harris Tea’s manufacturing facilities in Moorestown, New Jersey, and Marietta, Georgia. Approximately 300 Harris employees will join TreeHouse. 
• The purchase by TreeHouse comes as the private-label giant has been buying and selling food and beverage offerings to improve its margins and generate higher growth. 

Dive Insight:

During the last three years, TreeHouse has purchased condiment brands, a pretzels manufacturer and a coffee production facility. At the same time, the Illinois-based company has unloaded its snack bar business and a significant portion of its meal preparation operations for nearly $1 billion.

The acquisitions help TreeHouse build scale in businesses where it already has a presence, while the divestitures remove slower growth or non-core operations. The tea deal with Harris further builds upon its recent M&A strategy. 

Tea is the most widely consumed beverage in the world behind water, according to the Tea Association of the U.S.A. Last year alone, almost 86 billion servings of tea, or close to 4 billion gallons, were consumed by Americans. The trade group noted that more than half of the U.S. population drinks tea. Demand for the beverage has grown as more people turn to tea’s variety, convenience and healthy attributes.

Steve Oakland, TreeHouse’s CEO, said the acquisition of Harris Tea “strengthens our competitive positioning in the fast-growing tea category.” He said TreeHouse will add unique blending and sourcing capabilities while increasing its depth and scale. 

“This acquisition aligns with our long-term strategy to build capabilities in our higher-growth, higher-margin categories,” he added.

While TreeHouse adds new production capabilities to its portfolio, it continues to grapple with the fallout from an October recall of frozen toaster waffles, Belgian waffles and pancake products at its Ontario, Canada, facility due to the possibility that they could be contaminated with listeria. It’s the second major recall to impact TreeHouse Foods in the last two years. The company initiated a broth recall in September 2023.