Case Study
The better the question The better the answer The better the world works
Case Study

How the right buyer helped a family grow global plant-based food production

Innovation in plant-based meat could have a major role in promoting healthier food alternatives and sustainable environmental practices.

Aerial shot of wally fry walking in a field
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The better the question

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 Agrawal, 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.

Fry's family foods burger product shot
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The better the answer

Mergers can strengthen sustainable food ecosystems

EY teams helped Fry’s forge a M&A transaction with plant-based food collective LIVEKINDLY.

In LIVEKINDLY, Wally and Debbie found such a partner. Based in the US, LIVEKINDLY is a global collective of plant-based heritage and start-up brands. It has established strategic partnerships with seed growers, producers and distributors who have invested in infrastructure to transform traditional meat production facilities into ones that can process plant-based products. 

Crucially, it was a potential buyer which shared many of the same ethical concerns of Fry’s themselves. 

“The mission and the vision for LIVEKINDLY Collective is to make plant-based living the new norm,” says Kees Kruythoff, Chairman and CEO of the LIVEKINDLY collective. “We strongly believe that the current food system is totally broken, and that we need to change from an animal-based food system to a plant-based food system.”

By partnering with LIVEKINDLY, Fry’s would be able to secure a trustworthy custodian of their business and values.

Ensuring the right strategic fit

Having helped generate global interest in the company that connected with Fry’s sense of purpose, EY teams worked to execute the deal.

EY teams brought a wide range of M&A advisory capabilities to the table, leveraging its global network of transactions specialists, and constructing a transaction that enabled a fruitful partnership between Fry’s and LIVEKINDLY.

“This was a chance for us to really bring the power of the EY M&A reach to the table with this deal, “says Clifford Sacks, EY Global M&A leader.

“We had a strong delivery leadership team of seasoned M&A practitioners with more than 40 years of M&A experience between them,” says Agrawal. “This enabled EY teams to lead the entire global cross border transaction process, modelling, structuring of the transaction, and negotiation of the key terms leading to a successful transaction.”

And there was considerable enthusiasm for the deal both within EY teams, and within the wider buyer’s market. “I don't think we're ever going to have a deal again with such universal interest as Fry's had. There was buying interest in every direction, from every continent, from other family-owned businesses, corporates, large multinational brands and leading private equity funds, to start-ups,” says Sacks.

Leveraging the deal-making capabilities and international reach of EY teams, Fry’s began to concentrate on what LIVEKINDLY could offer. According to Sacks, EY helped Fry’s finalize the deal in two distinct ways.

“Firstly, the range of potential buyers allowed Fry’s to select the perfect cultural fit. Wally wanted to be sure that he had a buyer that could help carry this beautiful thing he had created and put it on consumer shelves around the world,” says Sacks.

“And secondly, an appropriate commercial outcome. By bringing this huge universe of buyers together, we were able to achieve the right level of price tension to give them a satisfactory commercial outcome.”

The fry family pose together
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The better the world works

A shared vision helps shape stronger results

Sustainable food partnerships can enhance both human health and sustainability of the environment.

“Sustainability is one of the defining challenges of our lifetime,” remarks Steve Varley, EY Global Vice Chair – Sustainability. “The planet faces a multitude of problems which need creative solutions. But no single organization can do this at the scale and speed required on its own.”

For Fry’s, the LIVEKINDLY transaction has secured the future of their company. It has not only enhanced their family legacy, creating a generational family business with Wally and Debbie’s children and grandchildren continuing to strengthen the Fry’s brand. But it has also consolidated their position on the global stage, helping to catapult their products into markets all around the world and grow their response to the sustainability challenge at speed.

LIVEKINDLY, too, are excited by this partnership. “The most gratifying part of all this is to listen to the family and hear how proud and excited, and indeed how aligned they are for the continuation of Fry's as a part of the LIVEKINDLY Collective,” says Kruythoff.

The Fry’s and LIVEKINDLY transaction is a powerful example of what can be achieved when two purpose-led businesses come together.
Steve Varley
EY Global Vice Chair – Sustainability

The Fry’s deal has also enabled the company to protect and create additional jobs at its South African base of operations. “South Africa has a need for manufacturing jobs – and this is going to directly create a lot of jobs, as they grow and expand,” says Sacks.

Agrawal adds, “in addition to manufacturing jobs, the deal will also benefit local farming communities by incorporating them into a green foods supply chain.” This was an essential point for Wally Fry, who had worked closely with locals ever since founding the business. “Some of the people at Fry’s have worked for me for 20, 30 years,” he explains. “There was no way I was going to let them suffer as a result of this deal.”

Varley continues, “The Fry’s and LIVEKINDLY transaction will create much-needed green jobs and make it easier for even more people to make healthier choices that help lower their greenhouse gas emissions. This is a powerful example of what can be achieved when two purpose-led businesses come together.”

Enabling a sustainable transformation of the global food system means enhancing the ecosystems that underpin it; Facilitating strategic business partnerships between the right companies in the right way. In this way too, then, EY is doing its part to help build partnerships and ecosystems that create long-term value for business, people and the planet. 

“Rahul and I might never have the privilege of doing anything as important as this again,” says Sacks. “I was able to sit down across the table from my wife at dinner when we were finished with this project and I said to her, ‘I feel so good about this. I feel that I've done something important and valuable’.”