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Industry

Hispanic/ Ethnic Foods

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Refrigerated Mexican Food Manufacturer
Customer & Market and Operational Due Diligence of Refrigerated Mexican Food Manufacturer:  Validating National Expansion Opportunity for a Regional Brand

Conducted a 2-phase due diligence to: (1) validate the national expansion opportunity in grocery, (2) validate the growth opportunity in foodservice, and (3) assess operations risks and opportunities. Gotham interviewed ~70 retail and foodservice buyers and surveyed ~4,000 consumers to establish target’s brand positioning and growth opportunity. We also leveraged Nielsen data to build an MSA-level market sizing model to establish a $2B addressable market size. To support national expansion, Gotham established second plant economics and profiled the competitive landscape to identify acquisition candidates. Our operational assessment did not reveal any significant commodity pricing margin risks and, in fact, identified material yeild and labor savings opportunities. These fact-based conclusions gave the client the conviction needed to submit an aggressive bid to win this hotly contested auction.       

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Branded Ethnic Foods Manufacturer
Operational Due Diligence of Family-owned Branded Ethnic Foods Manufacturer: Assessing Operational Scalability to Support Targeted Growth

Built operational performance fact base and cost model for due diligence of an entrepreneurial company. Effort included: first-hand observation of operations, management interviews, data collection and synthesis, equipment condition and capex requirement assessment, food safety review, and interviews with potential co-packers. Established that:  the existing plant can meet the buyer's target of growing the business 2-3X current volume; identified 5-6 viable and interested co-packers; identified opportunities to reduce cost per case by 16-17.5%; and provided a road map for improving operations. The PE firm is in process of closing the deal.

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Specialty Foods Manufacturer
Customer and Market Due Diligence of Regional Specialty Foods Manufacturer: Validating Growth Potential

Conducted Customer and Market Due Diligence to establish/validate that company could support 10+% CAGR growth and expand nationally. Analyzed IRI/Nielsen data, conducted extensive secondary research, built and ran scenario models, conducted field research and customer interviews to establish positioning and outlook of premium product companies overall and the target specifically, as well as feasibility and requirements for growing the brand nationally. Gotham team identified 4 growth levers for the company.

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Private Label Canned Food Manufacturer
Customer & Market and Operational Due Diligence of Private Label Canned Food Manufacturer:  Establishing Growth Prospects, Margin Risk, CapEx Risk, and Operations Improvement Opportunities

In sync with the needs of each stage of the deal process, conducted phased customer, market, and operational due diligence, initially focusing on:  1) growth outlook – established the target’s category presence, identified key market trends, and built a model to project category growth; 2) competitive positioning – interviewed 27 PL and category buyers from supermarkets, wholesalers, food service companies, and brokers; and 3) CapEx and operational risk – visited the target’s 3 plants, assessed capacity, and reviewed operational improvement plans. After the client signed the LOI, Gotham conducted:  a deep dive assessment of margin risk, using 7-year SKU-level price/margin data and outlook for major input cost drivers; and an in-depth operational diagnostic of material yield, direct labor, and inventory costs.  

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Specialty Foods Manufacturer
Operational Due Diligence at Family-owned Specialty Foods Company:  In A Data-poor Situation, Confirming Operational Readiness to Support Targeted National Growth

Conducted detailed observations of manufacturing operations (evaluating equipment, labor, downtime, changeovers, etc.) and developed bottom-up capacity model to quantify production increases and cost savings. Determined that target’s facility had sufficient capacity to meet 5-year targeted growth projections; identified cost per case savings 15-20% from labor and overhead reductions; found low risk of future operational surprises (e.g., major equipment cap ex requirements, food safety/quality issues, etc.); and provided PE Client with ingoing operational value capture plan. Client moved forward with acquisition and immediately began implementation of Gotham recommended improvement initiatives.

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Frozen Mexican Food Manufacturer
Performance Tracking Tools at Leading Frozen Mexican Food Manufacturer: Helping New Management Make Fact-based Decisions

Constructed methodology and models to view profitability by customer, product, and channel. Results led new management to refocus product development/growth strategy on profitable products. Management succeeded in doubling revenue of profitable products and private equity owners sold firm to a strategic buyer in 3 years for a 26% compound annual return on investment.

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