Woolworths buys its key supplier that makes 1,400 products with 8,000 employees

Woolworths has cleared all regulatory hurdles to acquire 100% of In2food, one of the retailer’s key suppliers for the past three decades.

On Thursday, 8 October, Woolworths announced that all regulatory suspensive conditions for the transaction have been fulfilled. Now, completion of the deal is expected in November.

Woolworths explained that the acquisition advances the group’s strategic intent by building on its Food segment’s market-leading premium food ecosystem.

Woolworths Food has been the retailer’s strongest source of competitive advantage and primary engine of value creation for years. 

In its latest results, the retailer explained that it plans to reorient its business around this crown jewel, with In2food set to play an important role.

“The transaction supports the group’s focus on prioritising growth in Woolworths Food,” the retailer explained.

With full control of its main supplier, Woolworths can strengthen its differentiation, unlock new revenue streams, and direct capital with greater discipline towards areas where it has the “right to win”.

In2food has been a producer of convenience foods and a strategic supplier to Woolworths Food for 30 years.

The group was founded in 2010 through the merger of Interfruit and Lombardi Foods.

Today, it employs 8,000 people and produces 1,400 product types across fresh produce, bakery, and ready meals, convenience items, and pantry items categories.

Woolworths said the acquisition of this key supplier will strengthen its supply chain resilience and further differentiate its premium offering.

On completion of the transaction, In2food will continue to operate as a standalone business within Woolworths. 

“It is envisaged that the current senior leadership team will remain in place, ensuring continuity of operations and preserving the entrepreneurial culture that has contributed to the business’s success,” the retailer said.

Woolworths explained that this greater integration will increase agility and efficiency across its supply chain, improving speed-to-market and responsiveness to changing customer needs.

“It will also enhance innovation and new product development, supporting Woolworths Food’s continued leadership in premium food retailing in South Africa,” it said.

However, the retailer also emphasised that it will continue to work closely with its other suppliers, which will continue to play an integral role in the Food business.