AUSTIN, MINN. – Hormel Foods Corp.’s June 7 closing of its $3.35 billion acquisition of the Planters snack business from Kraft Heinz Co. opened a host of opportunities, according to the company. Management sees Planters anchoring Hormel’s snack portfolio and leading its growth as a competitor for individual and group snacking occasions.
“The Planters business is our springboard for combining our snacking and entertaining brands,” said James P. Snee, president and chief executive officer of Hormel Foods, during an Oct. 14 virtual investor day conference.
Hormel brands seen complementing Planters in snacking include Columbus meats, Hormel Gatherings, Skippy and Wholly Guacamole.
“With the addition of the Planters and Corn Nuts brands augmenting our already strong snacking spaces like party trays, salsa, guacamole and charcuterie, we think the Hormel portfolio is now really well equipped to meet the consumers wherever they need to be in terms of snacking,” said Jeff Frank, vice president of Grocery Products. “And they can have a satiating as well as a flavorful snack experience based on our portfolio.”
Mr. Snee said his expectation is snacking and entertaining occasions are going to accelerate as the COVID-19 pandemic subsides and consumers return to on-the-go lifestyles, group gatherings and family celebrations.
“Now, because of (the Planters acquisition), we have taken a holistic view on the snacking space,” he said. “A view that covers all dayparts and occasions.”
Hormel’s acquisition of the business included most products sold under the Planters brand, including mixed nuts, trail mix, Nut-trition products, Cheez Balls, Cheez Curls and Corn Nuts branded products. Hormel Foods also acquired all global intellectual property rights to the Planters brand and three manufacturing plants in Fresno, Calif.; Fort Smith, Ark.; and Suffolk, Va.
Mr. Frank said early analysis of the acquisition focused on Planters’ scale and how it may impact Hormel Foods. But he emphasized other attributes of the acquisition.
“The Planters brand also comes with a high level of expertise and a strong reputation in the industry and I think a track record for successfully growing the snacking category overall,” he said. “Our high-level objective for the brand is really to convert that high brand awareness to increased purchase through driving household penetration and share gains.”
Three strategies Hormel Foods plans to employ to meet those goals include advertising and brand support centered around key consumer occasions.
“The second area that we're focused on is renovating our core,” Mr. Frank said. “We've got some exciting packaging innovation with an eye toward environmental sustainability and consumer interest, along with some really interesting flavor innovation coming in 2022 as well.”
The third strategy will focus on leveraging Planters’ scale to organize around a total portfolio snacking within Hormel Foods.
Beyond snack occasions, Planters also is expected to be a catalyst for growth in the convenience store channel.
“Roughly 15% of the Planters acquisition is in the c-store space,” said Deanna T. Brady, executive vice president of Refrigerated Foods. “And we're really excited about that because it really gives us a strong base of business in the c-store channel.”
Mr. Snee added, “Not only do we need to grow in the areas where we are strong, but we need to grow in areas where we haven't had a large presence like convenience stores. Planters provides scale and gives us a leadership position in this very important channel, and we need to take advantage of that opportunity.”