Private equity has doubled down on investments in certain recession-resistant sectors amid a lull in deal activity. One such sector is healthier food, a specialty niche that gained momentum during Covid lockdowns as consumers switched to healthier and more sustainable diets.
One example is Manna Tree Partners’ acquisition of a majority stake in Verde Farms, an organic beef brand based in Woburn, Massachusetts. The transaction, announced in late July, followed an initial investment in Verde Farms in 2020 by the Vail, Colorado-based private equity firm, which focuses on companies focused on improving human health.
PE hub spoke with Steve Young, CEO at Manna Tree, to learn about the acquisition company’s goals for Verde Farms and why Manna Tree is so optimistic about the healthier food sector.
Why was Manna Tree interested in Verde Farms?
Verde Farms is a perfect fit with our mission at Manna Tree to improve human health through innovative nutrition and food companies. The company is a leader in the organic, grass-fed beef market, offering consumers a more nutritious and sustainable protein option. The healthier beef segment is experiencing remarkable growth, outperforming conventional beef by nearly three times, making Verde an attractive investment opportunity.
Why did Manna Tree want to acquire a majority stake in Verde Farms?
We have been very impressed with the opportunity for the company since our initial investment in January 2020. By taking a majority stake, we can now play an even more active role in driving Verde’s growth and expansion. We see tremendous potential in the company and believe our expertise and resources can help accelerate its success in the fast-growing healthier beef category.
Were there any challenges in this process?
We have a very strong relationship and are focused on driving growth for Verde Farms. Of course, the entire industry was facing the pandemic at the beginning of our relationship. Despite this, Verde Farms has continued to grow and we continue to believe that there are very exciting opportunities ahead.
How does this deal increase the value of Manna Tree’s portfolio?
This gives us a foothold in the $4.4 billion healthier beef market, which has grown an impressive 15 percent annually over the past five years. This investment strengthens our presence in the sustainable food space and complements our existing portfolio companies. It also aligns with our belief in the growth of the protein category overall.
What are Manna Tree’s goals for Verde Farms?
Our main objectives are to grow Verde’s business, support product innovation and expand market reach.
Does Manna Tree have a timeline for exiting this investment?
No. Our focus right now is to help Verde Farms grow and succeed long-term.
