TreeHouse Acquires Coffee Facility, Direct Ship Business From Farmer Brothers

TreeHouse Foods has reached a deal with Farmers Brothers Company to acquire its Northlake, Texas coffee facility as well as the company’s non-direct store delivery coffee business.

The deal between the two private label manufacturers is valued at approximately $100 million, and is ​​expected to close within the next 60 days. Built in 2017, the Northlake facility brings roasting, grinding, flavoring and blending capabilities to TreeHouse Foods’ coffee portfolio, adding to the company's existing private label single-serve pod and ready-to-drink coffee businesses. 

"The state-of-the-art Northlake facility strengthens TreeHouse Foods' category depth in coffee as a focused, private label leader and is consistent with our strategy to pursue opportunities that drive category growth and deliver attractive financial returns," said Steve Oakland, CEO and president of TreeHouse Foods. "As we continue to execute our long-term growth initiatives, we're pleased to add new capabilities, particularly in roasting and grinding, which make us a more vertically integrated coffee manufacturer able to further penetrate this high growth, high margin category."

Farmer Brothers has historically been a bulk ground coffee supplier to TreeHouse Foods for its pods and beverages. TreeHouse Foods will also assume select customer relationships and retain approximately 180 team members from Farmer Brothers to support operations at the facility.

Farmer Brothers will transition the entirety of its direct store delivery (DSD) production operations to its Portland, Ore. roasting and production facility and will continue existing relationships with third-party roasters for additional capacity. The company’s corporate headquarters will remain in Northlake, Texas, where it will continue to lease office space at its current location.

“Exiting the direct ship space will allow us to focus almost exclusively on DSD, which is our most profitable and highest growth potential business, while also assuring our valued direct ship customers are well-served by a national leader,” said Farmer Brothers President and CEO Deverl Maserang. “With a sole focus on DSD, we will be able to realize even greater internal efficiencies and cost savings, while also better serving our largest, most profitable customer base.”