Enwave Corp., a Canadian-based vacuum microwave technology specialist, sold the Moon Cheese brand of snacks to former joint venture partner Creations Foods.
Moon Cheese was created as a partnership between the Canadian firm and Washington-based Creations Foods in 2015 under a joint venture, NutraDried Creations, split 51% and 49%, respectively.
The brand was initially launched as a “proof of concept” for the company’s proprietary vacuum microwave technology before Enwave bought Creations Foods’ stake in NutraDried Creations in 2018, Enwave CEO Brent Charleton said. The business was then traded under the Enwave banner as the NutraDried Food Company.
Gluten-free and plant-based snack provider Creations Foods is owned by Canadian private equity firm Rio Investment Partners, focused on the agri-food industry. The snack company, located in Ferndale, produces the Toatzy brand of Chewma protein crackers and bites, and also serves private label customers.
Aki Georgacacos, president and CEO of Creations Foods, and also co-founder and CEO of Rio Investment Partners, did not respond to just food request for comments on the transaction.
A deterioration in financial performance and pressure on gross margins linked to rising commodity prices in the years following the purchase, has led Enwave to liquidate the Nutra dry food business.
Charleton added: “The company did pretty well for the next two years and then kind of plateaued and kind of fell off in the last year and a half to two years in financial performance. That downgrade in financial performance was primarily tied to huge increases in commodity prices for block cheese, which eroded gross margin.
“Once we activated that ordered relaxation, we had several people come to us and say, ‘well, how much? We would like to take on this business and do it on a scale that makes sense.’”
Creations Foods is acquiring the Moon Cheese brand, inventory and a “large-scale” microwave vacuum unit for $2.75 million to $3 million, with final pricing to be set later this month, Charleton said.
The Ferndale firm will produce the snack brand in the same facility on a leasing basis and on lower square footage than the NutraDried operation.
Charleton said Enwave has granted 50 licenses for its vacuum microwave technology in 23 countries, including PepsiCo, the US snack food giant, and Japan-based Calbee.