Is Ireland's humble ready-meal about to get a French makeover? Swiss-Irish food giant Aryzta is in talks to buy a 49 per cent stake in the French food business Picard with the explicit purpose of internationalising the brand.
The latter might well be described as the Avoca or the Donnybrook Fair of the food sector in France, selling gourmet dishes to fussy foodies with busy work lives. It prides itself on selling mostly high-quality French produce through its 930 stores, and now commands a 20 per cent share of the fast-growing frozen food market there. It also specialises in home delivery, allowing customers order retaurant-style dishes online and have them delivered to outhouse freezer units while they work.
Recently, it has begun to expand internationally, opening stores in
. It’s reasonable to assume that if the deal goes ahead Aryzta will nudge it in the direction of
. To acquire a 49 per cent stake in the business, Zurich and Dublin-listed company, best known for its Cuisine de France brand here, will have to shell out a hefty €446 million. The price coincides neatly with the money Aryzta is expected to generate from the sale ofa two-third share in its agribusiness arm
(€404 million) and from the disposal of Tullamore-based
(€40 million), also announced yesterday. Under the terms of the deal, Aryzta would have the right to acquire 100 per cent of Picard in three to five years, which makes it the firm’s biggest European investment.
Since it was formed in 2008 through the merger of agribusiness group IAWS and Swiss food business Hiestand, Aryzta has mushroomed into a global food empire with a dizzying array of interests in
. Its par-baked products, which are sold into retail multiples like
as well as quick serve chains like
, generate an annual turnover of €4.8 billion. Not content to rest on his laurels, chief executive
regularly admits to being haunted by the idea of becoming irrelevant. Announcing plans for the Picard acquisition yesterday, he said the investment was “consistent with Aryzta’s strategy of consumer relevancy through diversifying markets and channel positioning” – corporate speak for trying to stay relevant.
Perhaps because of their rich culinary heritage, French people have been slow to take to frozen food, still consuming substantially less than other countries like Ireland.
However, they are fast catching up with the rest of us, primarily because of brands like Picard, which represent not just convenience, but gourmet convenience. Whether Aryzta’s potential €446 million bet on the future direction of Europe’s food sector pays off, only time will tell. What’s more certain is that on the back of the economic recovery discerning Irish consumers are likely to have an appetite for the premium French brand.