Pacific Equity Partners acquired Manuka Health in a private process in December 2015. The company produces and sells Manuka honey, as well as honey-related products, foods and supplements. While its beehive and manufacturing operations are based in New Zealand, it has distribution channels extending to 45 countries and more than 11,000 retail outlets.
Following the acquisition, Pacific Equity Partners focused its attention on renewing Manuka Health’s management team to ensure it was capable of managing the regulatory and ESG challenges the business faced. The firm installed a new chief executive, John Kippenberger, who had extensive experience in the consumer goods sector as the former CEO of the Australian meat and dairy division of George Weston Foods. Together with Kippenburger, Pacific Equity Partners recruited a completely new senior management team with expertise in food products, agribusiness and social responsibility.
This was important because, as Manuka honey can only be produced during six weeks of the year, strong biodiversity management is an essential feature of the company’s operations and financial performance. Weather conditions and Manuka tree density also have a considerable impact on honey potency and supply.
Pacific Equity Partners therefore drove the identification of additional land suitable for regeneration; this was essential for the expansion of the business and enabled the company to internalise its honey supply. The number of in-house hives increased from 5,000 to 20,000 over the course of the investment period.
Under Pacific Equity Partners’ guidance, Manuka Health also took on a leadership position in the wider industry. The company led industry engagement with regulators, both in New Zealand and key export markets and, following extensive consultation, New Zealand’s Ministry of Primary Industries released a universal Manuka Definition in 2017. This development will have a significant impact on reducing counterfeit product.
In addition, Pacific Equity Partners undertook several important ESG initiatives, including pioneering the use of climate and bloom monitoring technology to enable remote monitoring of apiculture, as well as launching land regeneration initiatives to restore over 20,000 hectares of Manuka. Manuka Health has also improved bee health and reproduction through targeted population drops into remote areas during flowering periods and wintering programmes that keep hives protected out of season.
Elsewhere, Pacific Equity Partners helped corporatise the business and invested significantly to drive channel and customer expansion, brand recognition, new product development and supply chain optimisation. New product categories launched included lozenges and wound care, while new markets included China and Europe. Online sales, meanwhile, increased by more than 1,000 percent in three years.
Manuka Health was sold in an auction process that attracted interest from both private equity and trade. It was ultimately acquired by a South-East Asian trading company, almost tripling Pacific Equity Partners’ money in the process.
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