VFG group

VFG is aiming to become ‘the vegan Unilever’

The Vegan Food Group has struck its biggest deal to date to acquire German organic alt-meat producer TofuTown, creating a major player in the European plant-based market.

TofuTown generates annual revenues of €60m (£51m) and makes all-natural, organic tofu, plant-based spreads and meat alternatives in one of Europe’s largest vegan factories for customers such as Aldi, Lidl, DM and Edeka, which is the biggest supermarket chain in Germany.

It positions the enlarged VFG – formerly known as VFC Foods – to move into profitability this year, with ambitions to scale group revenues to more than £85m.

The deal follows VFG changing its name in January as the group laid out its vision to continue on the acquisition trail and build on a year of expansion in 2023, which included rescuing Meatless Farm from administration and buying Clive’s Purely Plants.

CEO Dave Sparrow said the TofuTown deal heralded the arrival of VFG as “a major player in plant-based food”.

“This acquisition allows VFG to fast-track our growth across the UK and the EU in chilled, frozen and ambient products, in both branded and own-label retail, as well as foodservice,” he added.

Matthew Glover – who founded VFC with partner Adam Lyons in 2020 and took on a more hands-on role at the group last month as chief mission officer – said there was “more exciting M&A news on the horizon”.

“Consolidation is required in the plant-based space, and, with early signs of a rebound, VFG is well positioned to capitalise on market conditions and supercharge growth in the UK and Europe,” added Glover, who is also the founder of Veg Capital and co-founder of Veganuary.

TofuTown was established by Bernd Drosihn in 1981 and today operates from headquarters in North Rhine-Westphalia and a 600,000 sq ft plant-based factory in Lower Saxony, employing about 300 staff.

As well as organic tofu and other meat alternative products, the company makes spreads, tomato sauces, ready meals and snacks, all using 100% natural ingredients.

“Joining VFG is an exciting opportunity for TofuTown to successfully continue Bernd’s vision over the coming decades,” said CEO Markus Kerres.

“With Germany and the UK being the two biggest markets for plant-based foods, we’re well-positioned to thrive.”

VFG, which is aiming to become “a vegan Unilever”, has a range of 80 SKUs across 21,000 distribution points, with a raft of NPD launched this year.

The group has entered into a share purchase agreement to acquire all shares in TofuTown, with completion expected imminently, pending final institutional authorisation.

KPMG advised on financial due diligence, while Addleshaw Goddard provided legal advice.