Tapatío, a prominent hot sauce brand based in the United States, has been acquired by the private equity firm Highlander Partners, marking a significant development in the food and beverage industry.
The founding Saavedra family retains a minority stake in Tapatío, while U.S. investor The Arnold Companies has taken a “significant” minority shareholding. However, the financial terms of the deal have not been disclosed.
According to Tapatío, Highlander’s support will enhance its distribution efforts. The brand aims to utilize this investment to accelerate product development and explore “complementary” new product areas.
Jeff Partridge, a partner at Highlander, stated, “We share the Saavedra family’s vision to maintain the brand’s legacy as we carefully and purposefully target opportunities to grow the brand geographically, introduce new flavours and products, and deepen penetration in both the retail and foodservice channels.”
Founded in 1971 by Jose-Luis Saavedra Sr., Tapatío not only produces hot sauces but also offers Tapatío-flavoured snacks like Doritos and Cheetos through a long-standing collaboration with Frito-Lay. Notably, all its products are certified gluten-free. Luis Saavedra Jr., the company’s former CEO, mentioned, “Highlander is a perfect fit given their extensive background in the branded Hispanic food category, and we are pleased to have a partner that invests their own capital and takes a long-term strategic approach to growing companies.”
This acquisition underscores the growing interest of private equity in U.S. condiment brands. For instance, Advent International recently forged a deal to acquire Sauer Brands, the parent company of Duke’s Mayo, from Falfurrias Capital Partners. Although the financial specifics remained undisclosed, sources suggest the deal valued Sauer Brands at approximately $1.5 billion. Advent also plans to acquire brands including Mateo’s Gourmet Salsa and Kernel Season’s popcorn seasoning as part of this transaction.
Moreover, in July, Vilore Foods, a U.S. importer and distributor, acquired Tia Lupita Foods, a Mexican-style food company founded by Hector Saldivar in 2016. Tia Lupita markets gluten-free, non-GMO, and preservative-free products, including hot sauces and grain-free tortilla chips.
In conclusion, as the food and drink business evolves, acquisitions like these highlight notable food and drink consumer trends and the strategic movements of major players within the industry.