Is business purpose the key to sustainable growth?
Fry’s Family Foods needed a buyer that would align to its purpose and mission.
Vegetarian and vegan diets are growing in popularity. With the rise of the conscious consumer, while not forgoing meat entirely, a growing number of people around the world are seeing the potential benefits of supplementing their diets with more and more plant-based meals – to their health, and the health of the planet.
Animal-based foodstuffs can also have a significant impact on global emissions. Around 14.5% of annual global greenhouse emissions are accounted for by the meat and dairy industry. Meat provides just 18% of the world's calorie intake, but uses 83% of farmland. On top of this, the high levels of saturated fats present in traditional processed meat have been associated with a range of health issues.
Helping promote this transition to more plant-based diets are a range of companies offering food substitutes that aim to accurately replicate the taste, smell and texture of real meat.
Among these companies is South Africa’s Fry’s Family Foods (Fry’s), established by husband-and-wife team Wally and Debbie Fry in 1991. It was not an expected career move for Wally, a livestock trader and the son of farmers. But when he married Debbie, a vegetarian, his eyes were opened to a whole new world of food.
“When I first mentioned to Wally that I was a vegetarian, he was shocked,” says Debbie Fry, Co-Founder and Director, Fry’s Family Foods. “I don't think he'd ever heard of a vegetarian before.” Slowly, Wally was drawn in by the ethical considerations of meat-free living. However, he struggled to find an adequate replacement for the flavor and texture of meat. So, they decided to create an alternative – which eventually grew into Fry’s Family Foods.
For the last 30 years, Fry’s has been at the cutting edge of the plant-based meat world, and during that time it has grown substantially, eventually exporting to more than 20 countries globally. However, the company began to reach its growth limits, logistically and infrastructurally.
“We began to realize that to take Fry’s to the next level we needed to make it part of a global organization,” says Wally.
The Fry’s brand was an attractive proposition for prospective buyers and caught the attention of EY teams. Rahul Agarwal, Strategy and Transactions Associate Partner M&A at Ernst & Young - South Africa, was among those who saw the potential in the business ahead of the market. “With our focus on supporting entrepreneurship globally, Fry’s had been a previous EY Entrepreneur of the year winner. We had observed the Fry's Family Foods business in particular, as one of the companies with a highly differentiated approach and one that actually contributed to solving these very global issues,” he says.
“What’s more, I personally found it very exciting – I even reached out to Wally and the family three years before the transaction and we kept in touch before EY teams were engaged with the deal,” he says.
Wally’s and Debbie’s commitment to purpose meant that beyond a suitable financial outcome, their core ambition was to find a business partner who would honor the purpose of the Fry’s brand and help promote their business and family legacy in a meaningful way.