Ebro swallows BIA

Ebro Foods has purchased Spanish organic baby food maker Bioalimentacion Infantil de Andalucia (BIA) in a bid to exploit the lucrative organic baby food sector.

Ebro intends to use the acquisition of BIA as a springboard to enter the French market, where two companies – local supplier Vitagermine with its Babybio brand and German organic specialist Hipp ­– are the key players in the organic baby food sector.

The French market for organic baby food has until recently been quite underdeveloped, with Hipp unable to replicate the success that it has enjoyed in Northern Europe. However, according to LSA, sales of organic infant formula rose by 25% in the year to February 2017, while sales of other organic baby food were up 33% – compared with declining sales in overall baby food, so penetration is rising rapidly.

No doubt Ebro hopes to emulate the success of other companies that have bought up small organic players in the baby food sector, such as Hain Celestial with Ella’s Kitchen and Campbell’s with Plum Baby.

Better signs for Ebro’s latest baby food foray

However, this is not Ebro’s first foray into baby food, as it previously owned the Puleva brand as part of its Ebro Puleva dairy business, which it sold on to Lactalis in 2010.

This time, however, the signs are more auspicious. BIA is a standalone company operating solely in the organic baby food sector, rather than being a brand extension to a larger business.  Moreover, Ebro already has an organic subsidiary in France in the form of Celnat, which it acquired in 2016. Added to this, because the French market is underdeveloped, there are currently not many players with significant sales of organic baby food – although Nestle has recently launched its own organic range, in recognition of the buoyant state of the sector.

As BIA has been in bankruptcy protection since 2015 as a result of its rapid expansion and inability to fund this, Ebro’s clout can make it a white knight for the company.