PAG, a Hong Kong-based affiliate of the Blackstone Group, has agreed to acquire Australia-based savory snacks manufacturer Patties Foods and ready-meals manufacturer Vesco Foods for an estimated $472 million. The move adds home leading brands such as “Four’n Twenty” and “Lean Cuisine” to its portfolio. However, these acquisitions will only be beneficial for PAG in the long-term, says GlobalData, a leading data and analytics company

Parthasaradhi Reddy, Consumer Analyst at GlobalData, comments: “Apart from  expanding PAG’s product portfolio and adding to the existing brands such as Red Rooster, Oporto, and Chicken Treat, and the Cheesecake Shop, the new acquisitions will allow the company to enter into a market with high per capita consumption of snacks.”

However, the per capita consumption of savory snacks in Australia is expected to decline from 3.3kg in 2021 to 3.1kg in 2026. Moreover, the savory snacks market is expected to be relatively stagnant and record a very modest volume CAGR of 0.2% during 2021-26.

Reddy concludes: “The competition in the Australian savory snacks market is intense, with PepsiCo gaining a huge lead over other companies. The entrenched presence of global multinational companies will force PAG to spend significantly if it has to gain a share.

“PAG’s acquisition of Patties Foods and Vesco Foods might diversify its presence in the consumer food segment in Australia, but it remains to be seen if PAG has the wherewithal and the patience to sustain in a mature market with bleak growth prospects.”