Acquisition is the first for the dairy group in 45 years.
Brazilian dairy group Tirolez announced Monday (6) the acquisition of Levitare, a leading producer of buffalo cheese in São Paulo, according to Scanntech, a retail data platform. The acquisition, which was closed for an undisclosed amount, adds a line of 50 buffalo milk products to Tirolez’s portfolio. The company has previously focused on cow milk products in its 45 years of operation.
Levitare has helped introduce buffalo milk products into everyday consumption over the past two decades. In addition to buffalo mozzarella, the company uses buffalo milk in other products such as Minas fresh cheese, Padrão cheese, and butter. Levitare also pioneered a lactose-free line of buffalo cream cheese and burrata.
This was the first time Tirolez has acquired a brand. Since its founding in Tiros, Minas Gerais, in 1980, the company has prioritized organic growth and the purchase of structural assets in its expansion strategy.
There is a historical similarity between the companies. Both were founded by siblings—Cícero and Carlos Hegg, in the case of Tirolez, and Denise and Jorge Nakid, in the case of Levitare. The Nakids began an artisanal production of cheese made from buffalo milk from their family farm’s herd in the city of Sete Barras, in the state of São Paulo, and created the Levitare brand in 2004.
Now, these items are part of the Tirolez portfolio, which already offers 28 types of cheese and over 130 different products. The new owner will expand the Levitare brand’s reach. “We identified in Levitare a mission and purpose that align with ours. While it is a family-owned company that preserves tradition, it has a strong culture of innovation and uses the best dairy manufacturing practices,” says Marcel de Barros, Tirolez’s chief executive.
According to Mr. Barros, the buffalo cheese segment has experienced double-digit growth over the past five years. The agreement with Levitare provides for the Nakid brothers to remain in the business throughout the integration between the two operations.
The acquisition was the first of its kind for Tirolez in its 45 years of operation, but it wasn’t a one-time deal, according to Mr. Barros, who has been CEO since the beginning of last year. He added that Tirolez expects to maintain double-digit growth and “eventually capture more acquisition opportunities down the road.”
“As part of our strategy, which we’ve been executing since last year, we identified some potential targets that would help us accelerate our strategy’s execution. This inorganic growth will allow us to move forward more quickly than if we were only focusing on the company’s organic growth,”
Mr. Barros told Valor. The deal’s completion is still subject to approval by Brazil’s antitrust regulator (CADE).
Mr. Barros says that the buffalo cheese market has seen compound growth of 15% over the past four years.
“Buffalo products are very light, healthy, and fresh. Consumers are looking for that,”
he adds.
However, consumption is still highly concentrated in Brazil’s Southeast region. Now, through a company with a national presence, the idea is to expand the consumer market for Levitare products. “Tirolez currently has over 600 sales representatives. We’re going to open up many possibilities and opportunities,” Mr. Barros explains.
Tirolez projects growth at a rate twice as high as the rest of the segment, gradually gaining market share. “For next year, the market expects volume growth of around 2%. So, we’re projecting growth of over 5% by 2026,” he said. In the state of São Paulo, the company holds a 12% market share.
Regarding the cheese segment in general, the executive sees potential for growth, as per capita consumption in Brazil is around 6 kilos per year, while in other Latin American countries, the volume is twice as high. Mr. Barros predicts that the CADE will approve the deal quickly. “The level of concentration is quite low,” he says.
Source: Valor International
