Prodesco Group, a Madrid, Spain-based distributor of food and beverages for the mid- to high-end hospitality industry, is assessing acquisition opportunities in the local market to complement its organic growth strategy, owner and CEO Alberto Mena Zabala said.

The company, which expects revenues of approximately EUR 60m for 2024, is interested in small to medium-sized distribution peers operating in the same segment of the hospitality space, providing quality, specialised products, thus allowing for an easy integration, Mena Zabala said.

Prodesco is interested in targets based in cities and provinces with large populations that are considered tourism and gastronomic hotspots, such as Malaga and Sevilla in Andalusia, Valencia and Alicante in the Valencia Community, and the Basque Country, he said. It has a strong presence in Madrid, where it has a 65% share of the medium and high-end hospitality market with over 4,000 clients, he added.

The company does not have a size range for acquisitions nor a specific timeline to close its next transaction, Mena Zabala said. In July, it announced the acquisition of Madrid-based Abarrotes Foods, a distributor specialising in ethnic foods, with a particular focus on Tex-Mex food, as well as Oriental and African specialities.

The target was on course to close 2024 with revenues of EUR 14m, he said, and around 1,500 products and about 1,500 clients in Madrid and Barcelona, of which 150 were also Prodesco clients. The deal value was undisclosed.

Prodesco Group, which has experienced annual growth of 30% over the last 12 years, aims to reach EUR 70m revenues for 2025, Mena Zabala said. His ambition is to build a business with revenues of EUR 150m by 2030, he added.

Future acquisitions will be financed with the company’s own funds and bank debt, Mena Zabala said, declining to disclose its current cash and debt positions. Welcoming investors is not an option Mena Zabala is interested in considering despite receiving approaches, as he wants to maintain independence, he said.

The company has also received takeover offers from larger, international players but the CEO said he has no interest in selling. Instead, the plan is to professionalise the company’s senior management team with CEO, CFO and COO positions, allowing the business to continue growing without depending on Mena Zabala’s leadership.

Currently, business decisions are taken by a management committee comprised of Mena Zabala, whose current role is “purely strategic” rather than executive, and the managers leading each of Prodesco Group’s business units, which operate autonomously, he said. His eldest child, who has studied business administration and entrepreneurship, is expected to join the business in the future, he added.

Organic growth plans

Prodesco’s immediate priority is to integrate Abarrotes, which did not have succession plans in place and was experiencing low growth rates, Mena Zabala said. The deal brings Prodesco a second headquarters in Barcelona, with a 500 sq m facility; a distribution network across Spain with 70 distributors, taking the group’s total number of HORECA clients to 40,000 premises; an opportunity to increase its presence in the ethnic foods space; and an network for exports to Italy, Andorra, Portugal and the UK, representing just less than EUR 1m, he said. Prodesco will retain the Abarrotes brand, he added.

The business is also focused on establishing a strong presence in Barcelona and is already in the process of securing larger facilities there – around 4,000 sq m – to increase its warehousing and logistics capacity. It also has plans to announce the opening of an 800 sq m factory in Madrid to prepare cooked octopus, a deal fir which was signed last week, he said.

Prodesco Group’s business units include Prodesco Distribuidor, which focuses on distributing dry, refrigerated and frozen foods and expects 2024 revenues of EUR 38m, of which around 8% will come from ethnic and oriental foods, Mena Zabala said; Vinos y Cervezas Singulares (VYCS), which distributes wines from three suppliers; DALT, which manages the whole group’s logistics, storage, distribution and transportation; and Deliplat Food, an artisan factory of around 700 sq m producing 5th range foods, with the capacity to achieve total revenues of EUR 5m, he said.

Prodesco was established in 1992 as a dry products warehouse distribution provider. Mena Zabala acquired the business in 2012, when it had revenues of EUR 500,000, and turned it into a comprehensive supplier of food and beverages for the mid- and high-end hospitality industry.

Mena Zabala has a master’s degree in commercial management and marketing. He is also a winemaker and sommelier and, of his 33 years of professional experience, has spent around 18 years working in the wine industry, which has helped him develop some of Prodesco’s business units related to wine, he said.