Coffee Company Owned by Detroit Equity Firm Makes New Acquisition
Detroit- and Toronto-based equity firm Huron Capital Partners announced Feb. 11 that its portfolio company Ronnoco Coffee has acquired the Des Moines, IA, coffee producer U.S. Roasterie.
“Over the past 20 years, U.S. Roasterie has partnered with hundreds of customers in developing and supporting their private label brands,” Scott Meader, Ronnoco’s chief executive officer, said in a news release. “The addition of this facility and management team gives Ronnoco another platform through which to pursue alternate channel growth in a large and growing segment of the coffee industry.”
Coffee is the second most sold commodity in the world, following only oil. That makes it a $20 billion industry globally. While coffee is typically grown in less developed countries, for reasons both of climate and agricultural cost, it is often roasted closer to the distribution point, in order to maximize flavor.
U.S. Roasterie is a private label roaster with approximately 60 employees. Ronnoco purchased it from Howard Fischer, but the terms of the deal have not been made public.
Ronnoco, which is itself jointly owned by Huron and Ronnoco management, has made four other acquisitions in the past two years as part of a buy-and-build business plan. By acquiring International Blends, Henderson Coffee, the coffee and tea aspect of Love Bottling Company and Biff’s Coffee, the company has expanded into Arkansas, Iowa, Kansas, Missouri and Oklahoma, with its products being sold in restaurants, convenience stores, offices and casinos.
Since Huron’s initial investment in 2012, Ronnoco’s revenue has increased by over 40%.
Meader promised to “leverage the capabilities, systems and outstanding customer service of Ronnoco” to make the latest deal a profitable one, with Huron Senior Partner John Higgins commenting that “We are thrilled to see Ronnoco continue to expand and execute on the buy-and-build strategy we envisioned, and we’re confident in the management team’s ability to use this as a runway to drive continued growth of the business.”