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BFD Expert Voices - Retail Deals

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Pete & Gerry's, a Butterfly Equity-backed producer of premium eggs, has acquired Farmers Hen House.

Why it matters: M&A in the sector is picking up, with the Brazilian meat producer JBS' acquisition of a 50% stake in egg producer Mantiqueira Brasil.

Driving the news: The deal comes amid a surge in egg prices due to avian flu outbreaks.

Production of eggs that are either pasture-raised or free-range are less vulnerable to avian flu and as a result prices for the premium products are more stable, Pete & Gerry's CEO Tom Flocco tells Axios.

Zoom in: Kalona, Iowa-based Farmers Hen House will join the Pete & Gerry's and Nellie's brands, which collectively cover the categories of organic, free-range and pasture-raised eggs.

By the numbers: The acquisition adds 90 family farms and a processing facility in Iowa, which will also support the growth of Pete & Gerry's across the Midwest and West.

As a result, Pete & Gerry's now operates four packing facilities and works with nearly 300 family farms in total.

Both companies have increased sales by nearly 50% since 2021.

Catch up quick: Butterfly, which targets companies in the food and beverage space, acquired a majority stake in Pete & Gerry's in 2021.

The intrigue: Vital Farms (Nasdaq: VITL), a leading producer of pasture-raised eggs, has seen its share price nearly triple from around $15 to about $43 over the past year, giving it a market cap of more than $1.9 billion, underscoring increasing valuations in the category.

Flocco declined to comment on Pete & Gerry's exit plans beyond stating that there's "a line of entry and exit."

What they're saying: "As the effects of avian influenza continue, this trend is expected to drive a larger share of the egg market toward premium options due to enhanced biosecurity afforded by more distributed farm networks," Flocco said in a statement.

Between the lines: The biggest challenge for Pete & Gerry's is articulating the difference between the various egg types, including caged, cage-free, free-range and pasture-raised, Flocco says.

The bottom line: The premium egg category is still in its early innings, Flocco says. 

Egg producer Pete & Gerry's buys Farmers Hen House

The PE-backed company will now operate four packing facilities and work with about 300 family farms.

Illustration of a frying egg with a dollar sign for a yolk

Pete &amp; Gerry&#x27;s, a Butterfly Equity-backed producer of premium <a class="gtmContentClick" data-vars-link-text="eggs" data-vars-click-url="https://www.axios.com/local/philadelphia/2025/01/27/egg-prices-bird-flu-outbreak-pennsylvania-safe" data-vars-content-id="09895d01-efac-4c40-87b5-6881935f4d07" data-vars-headline="Egg producer Pete &amp; Gerry&#x27;s buys Farmers Hen House" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/philadelphia/2025/01/27/egg-prices-bird-flu-outbreak-pennsylvania-safe" target="_self">eggs</a>, has acquired <a class="gtmContentClick" data-vars-link-text="Farmers Hen House" data-vars-click-url="https://www.businesswire.com/news/home/20250128270783/en/Pete-Gerry%E2%80%99s-Organics-LLC-Acquires-Farmer%E2%80%99s-Hen-House-to-Meet-Growing-Demand-for-Premium-Eggs" data-vars-content-id="09895d01-efac-4c40-87b5-6881935f4d07" data-vars-headline="Egg producer Pete &amp; Gerry&#x27;s buys Farmers Hen House" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.businesswire.com/news/home/20250128270783/en/Pete-Gerry%E2%80%99s-Organics-LLC-Acquires-Farmer%E2%80%99s-Hen-House-to-Meet-Growing-Demand-for-Premium-Eggs" target="_blank">Farmers Hen House</a>.Why it matters: M&amp;A in the sector is picking up, with the Brazilian meat producer JBS&#x27; <a class="gtmContentClick" data-vars-link-text="acquisition of a 50% stake" data-vars-click-url="https://www.axios.com/2025/01/27/jbs-egg-producer-prices" data-vars-content-id="09895d01-efac-4c40-87b5-6881935f4d07" data-vars-headline="Egg producer Pete &amp; Gerry&#x27;s buys Farmers Hen House" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2025/01/27/jbs-egg-producer-prices" target="_self">acquisition of a 50% stake</a> in egg producer Mantiqueira Brasil.

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Egg producer Pete & Gerry's buys Farmers Hen House

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