AUSTRALIA – Nissin Foods Co., a prominent player in the global food industry and a subsidiary of Japan’s Nissin Foods Holdings, has made a strategic move to enhance its presence in the Australian market by acquiring ABC Pastry, a local manufacturer renowned for its frozen dumplings.
The deal, valued at A$33.7 million (approximately US$23.3 million), was announced on September 27, 2024, and reflects Nissin’s commitment to tapping into the growing demand for Asian cuisine in Australia.
ABC Pastry, established in 1998 and co-owned by the Gaoyang family and Min Investments, is headquartered in Sydney.
The company specializes in producing frozen dumplings distributed through major supermarket chains and Asian grocery stores across Australia.
In the fiscal year ending June 2024, ABC Pastry reported revenues of A$15.2 million( approximately US $10.4 million) and a net profit of A$2.8 million (approximately US$1.9 million), indicating a robust business operation that aligns well with Nissin’s growth strategy.
In a stock exchange filing, Nissin Foods characterized the acquisition as “a premium opportunity for the group to tap into the Australian frozen food market.”
The company anticipates that Australia’s frozen food sector will experience significant growth, driven by an increasing Asian population and changing consumer preferences.
“Frozen dumplings, in particular, have been benefiting from the rising Asian migration to Australia,” Nissin stated, highlighting the evolving culinary landscape that favours convenient and high-quality frozen foods.
This acquisition is part of Nissin’s broader strategy to diversify its operations beyond its traditional Hong Kong and Mainland China markets.
Earlier this year, Nissin announced plans to acquire Gaemi Food, a South Korean manufacturer of baked grain crispy rolls.
By expanding into Australia, Nissin aims to establish a more resilient business model amid fluctuating consumer demand for its core products, such as instant noodles.
Nissin’s decision to invest in ABC Pastry comes when the company faces challenges in its home markets.
In 2023, Nissin reported a revenue decline of 5.3%, totalling HK$3.83 billion (US$492.8 million), primarily due to weaker demand for instant noodles.
However, profit attributable to owners rose by 5.6% to HK$330.2 million(US$42.4 million) during the same period.
This juxtaposition of declining revenues against rising profits indicates that while core products may be struggling, there are opportunities for growth through strategic acquisitions like ABC Pastry.
The acquisition also includes an option for Nissin to purchase the land where ABC Pastry operates its manufacturing facility for an additional A$8.8 million(approximately US$6.07 million).
This move secures production capabilities and positions Nissin favourably within the Australian market.
As Nissin continues to navigate its expansion strategy, it faces competition from established players in various regional markets.
However, analysts suggest that the growing Asian demographic in Australia presents unique opportunities for niche products like frozen dumplings.
“There will be ample opportunities for expansion of the premium frozen food market in Australia,” Nissin noted.
Nissin Foods’ acquisition of ABC Pastry marks a significant step towards diversifying its portfolio and capitalizing on emerging market trends within Australia’s frozen food sector.
By leveraging ABC Pastry’s established presence and expertise in producing frozen dumplings, Nissin aims to strengthen its foothold in a competitive landscape while catering to the evolving tastes of Australian consumers seeking authentic Asian cuisine.
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