Canada-based meal-kit subscription service Goodfood has acquired an 81% shareholding in local tea maker Genuine Tea for an undisclosed sum.
Genuine Tea's founding shareholders, Sarah Wilcox and David O’Connor, will stay at the helm of the business and own the remaining 19% of shares.
Goodfood has the right to take hold of these shares “in the future”, a statement said.
The purchase has been funded primarily from cash reserves, including “future performance-based payment features to the Genuine Tea shareholders”.
Genuine Tea will continue to run “as it currently does”, with Goodfood offering support with “logistics, marketing and financial reporting”, the latter told Just Drinks.
The company added that it looked to grow the craft tea brand “through the marketing expertise we have developed over the past ten years, facilitating penetration in the large Quebec market and supporting in the logistics of planning and delivery”.
Goodfood runs a direct-to-consumer online meal kit delivery across Canada. Following the deal, Genuine Tea’s goods will be sold through the company’s online meal kit subscriptions.
The tea maker’s products, which include loose-leaf organic teas, teabags, RTDs and matcha powders, will also continue to be made at its production facility in the Greater Toronto Area (GTA).
“Over the past decade, as we have scaled Goodfood, we observed a clear gap in the market for quality, niche direct-to-consumer food and beverage brands,” Jonathan Ferrari, co-founder and CEO of Goodfood, said.
“Canadian consumers want these brands but the infrastructure to scale and meet demand did not exist. Bringing Genuine Tea on board is the first step in building an exciting portfolio of brands that resonate with Canadians’ tastes and preferences."
When asked why it had decided to enter tea, Goodfood told Just Drinks: “Tea is the second-most consumed beverage in the world and in Canada.
“The current success of Genuine Tea and its premium product combined with Goodfood’s expertise and infrastructure in the direct-to-consumer food and beverage space will serve as a strong platform for Genuine Tea to accelerate its growth and scale its reach.”
Goodfood is a publicly-listed group, with its founders Ferrari, Neil Cuggy and Raffi Krikorian collectively owning around 30% of the shares.
The company manages one production plant in Quebec, where its headquarters are also based, and another in Alberta. The group also has a sorting facility in the GTA and administrative offices in the city.
"We have grown Genuine Tea from a farmers’ market venture to a multi-million-dollar national brand and we could not be happier to join the Goodfood family to propel Genuine Tea to the next level,” Wilcox said in a statement.
In the 39 weeks ended 1 June, Goodfood booked net sales of CA$118.7m ($84.2m), down 9.5% on 2023. Gross profit also dipped 2.3% to CA$50m. Operating income however grew 144.7% to CA$3.8m
In its third quarter, net sales dropped 8.3% to CA$38.6m, while gross profit stayed relatively flat at CA$16.9m.
