Chernogolovka Closes the Purchase of Kraft Heinz's Baby Food Business in Russia

Summary: the Chernogolovka Group of Companies has closed a deal to purchase the Kraft Heinz baby food business in Russia, acquiring two factories in Ivanovo and Georgiyevsk through its holding Aqualife Resource JSC, with all jobs preserved and a new own brand to be presented to retail this spring, Interfax reported on March 19, 2024.

The deal

The buyer in the transaction was Chernogolovka group holding Aqualife Resource JSC, a press release said. Two baby food factories came with the deal: one in Ivanovo and the other in Georgiyevsk in the Stavropol Territory. The transaction amount was not disclosed. The closure converts a long-running exit of a Western consumer group from the Russian baby food segment into an expansion of a domestic beverage and food holding.

The assets

The Ivanovo baby food plant is equipped to produce all categories of baby purees in glass and soft packaging and produces liquid milk porridges; the plant can make over 20,000 tonnes of finished products per year on six production lines. The Georgiyevsky Baby Food Plant, currently Heinz Georgiyevsk LLC, specializes in dry milk and dairy-free porridges, including hypoallergenic variants, and can produce 12,000 tonnes of finished products per year on two production lines. Combined, the two sites add more than 30,000 tonnes of annual baby food capacity to the group.

Transition and plans

Nataliya Sakhnina, general director of the Chernogolovka Group of Companies, said that all jobs at the plants in Ivanovo and Georgiyevsk would be preserved. Chernogolovka will launch a new brand on the market, to be presented to partners and retail chains this spring. To ensure a smooth transition, the group will continue to produce products under the Heinz brand for six months following the completion of the transaction.

Sakhnina framed the acquisition as an assortment strategy: currently Chernogolovka sees its task as developing its assortment, primarily in the categories of first complementary foods; the group also plans to launch the production of children's snacks and an innovative category of ready-to-eat meals. Production of baby food under the Chernogolovka baby brand will continue, but no longer at co-packing sites — at the group's own facilities.

The group profile

In business since 1998, known on the market as a producer of traditional soft drinks and bottled water.
Developing new businesses since 2016.
Represented on the market since 2023 via three major divisions: beverages, food products and baby food.
15 of its own production facilities after the two acquired plants are integrated.

What the deal changes

For Chernogolovka, the purchase moves the baby food line from contract manufacturing to owned capacity, removing co-packing dependence and adding two ready-made technological platforms — purees and liquid porridges in Ivanovo, dry and hypoallergenic porridges in Georgiyevsk. The six-month Heinz production bridge keeps the acquired lines loaded and the retail shelf occupied while the new brand is prepared. For the market, the transaction closes one of the remaining Western-owned baby food productions in Russia and hands its capacity to a group whose core business is beverages, widening its margin base into a category with higher entry barriers and more loyal demand.