European private equity fund adds some Zimbabwean sauce to its portfolio

Spear Capital, a private equity fund based in Norway, has added Efoods, the manufacturer of the Mr Sauce food brands, to its portfolio of Zimbabwean investments.

The transaction adds to Spear Capital’s exposure to Zimbabwe, where it has already invested in Dendairy and Metro Peech. Spear Capital is also invested in Associated Foods of Zimbabwe, which makes the Mama’s and Farmgold brands.

“As a manufacturer of 100% locally-sourced and locally-made food products, Efoods’ dedication to providing affordable homegrown goods that support local businesses aligns closely with Spear’s own goal of bolstering Zimbabwean businesses. We look forward to our new partnership with Efoods Zimbabwe,” Spear Capital says.

Efoods makes Mr Sauce, MiriPiri and Natural Forest, a honey brand that it acquired last year.

Spear Capital’s first investment in Zimbabwe was in 2013, when it put money into wholesaler Metro Peech. Metro Peech was profitable then, earning annual revenues of US$70 million. But Metro Peech last year went into liquidation and has been taken over by Sub-Sahara Capital Group (SSCG), the investment firm with interests in Gain Cash & Carry and Edgars. However, this episode hasn’t put Spear Capital off Zimbabwe.

Efoods buys inputs, such as peppers and other crops, from local farmers and has increased its shelf-space share in local retail over recent years. Spear Capital managing partner Martin Soderberg, in 2020, said he was scouting for a food processor to invest in.

“We are not an agri fund. Our investors are uncomfortable with us owning land that could be contested later on,” he said. “When I said we don’t do primary agriculture, that doesn’t exempt us from looking higher up in the value chain. We are thus actively looking at agro-processing opportunities. We are often confronted with the situation where some farms do processing, but they also own land. Others have separate companies registered where we could potentially invest in the processing unit of a bigger group.”

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