While specialty baking ingredients and inclusions provider Parker Products may specialize in short-term production runs, the Riverside Company is betting on the business as a time-honored investment.
The New York-based private equity firm, which has been increasingly active in the food and beverage space in the past few years, added Parker Products to its holdings earlier this month. Terms of the deal were not disclosed. The firm said it will use its experience ”to drive continued success for Parker,” a supplier that, as of late, has been working with major clients including Starbucks and Chobani.
Riverside’s current investment portfolio includes specialty food and beverage companies like Tate’s Bake Shop, Nustef Foods, Uinta Brewing Company and YumEarth.
“The acquisition of Parker Products by The Riverside Group is an investment opportunity that will accelerate growth,” Greg Hodder, president of Parker, said in a statement. “It will allow us to increase our capabilities and expand our product offerings. At the same time, we will still continue to offer our customers the same great service and intriguing ingredients we have always provided. For our longtime customers, the only change will be an increased capacity to meet their needs and offer them exciting new product possibilities.”
Following the acquisition, Hodder will stay president and Parker’s leadership team will remain in place. Parker broke ground on a new facility in Fort Worth, Texas, last December. The company’s operations will move to the new production location, which is expected to triple the company’s total capacity, when the facility is completed in early 2018.
Riverside’s Meranee Phing said that while Riverside’s current portfolio is focused on specialty items, Parker’s main draw was more due to the value-added ingredient supplier’s ability to produce limited-time offerings (LTOs) for brands, even those in the natural space.
“Parker plays on a lot of macro, positive food trends,” Phing told NOSH.”A lot of Parker’s business is a limited-time offering where we think the market is going; [we think] LTOs will continue to grow across a lot of categories as brands continue to look for ways to differentiate themselves through product variety.”
Parker has been the company behind some of food’s most popular — and Instagram worthy — limited-time products this year, including the near-mythical Unicorn Frappuccino at Starbucks, as well as more run-of-the-mill improvements like Chobani’s introduction of a natural, higher protein granola to their add-in side containers. Phing said Parker’s R&D team has been able to work with clients to react to a variety of changing consumer desires to fruition — and then they’re able to scale it.
This capability to do short production runs could allow mid- or large-size companies the ability to take away what has been a key advantage for emerging brands — their flexibility in adapting to consumer desires and interests. It also could open doors for brands to launch seasonal offerings — a category that has been especially of interest for brands as of late.
Phing added she believes Riverside’s team will help Parker continue to grow and scale within its new facility. Riverside’s experience with add-on acquisitions — a potential way for Parker to gain new facilities, capabilities and teams, Phing noted — is another exciting skillset that could benefit the company as it looks to the future.
“I think they are really excited to have a partner to help them navigate unchartered territory,” she said. “Greg and Sean are very operationally minded. They have done an amazing job over the last 20 years getting the business to where it is today, but I think they will benefit from having a strategic thought partner as they try to double and triple in size very quickly… While they probably could have opened up that facility on their own, I believe we can help them in thinking about where to place those bets and what is going to move the needle.”