PARSIPPANY, N.J. — B&G Foods, Inc. has discontinued Rickland Orchards, the business it acquired in October 2013 for $57.4 million. Originally launched in 2012, Rickland Orchards was a manufacturer of Greek yogurt-coated granola bars and bites.
|Tom Crimmins, c.f.o. for B&G Foods|
“ … We discontinued the Rickland Orchards brand as a result of continued insufficient demand,” said Tom Crimmins, chief financial officer for B&G Foods, during a conference call on July 29 to discuss the company’s second-quarter financial results. “Accordingly, we wrote off the related intangible assets and recorded non-cash impairment charges to amortizable trademarks and customer relationship intangibles of $4.5 million and $0.9 million. We also recorded a charge to cost of goods sold of approximately $0.8 million in connection with the write-off of raw material and finished goods inventory for the brand.”
Robert Cantwell, president and chief executive officer, added that the discontinuation of the Rickland business will allow B&G Foods to divert more resources to the execution of the company’s strategy around its New York Style snack brand, which has been challenged recently.
Under B&G Foods, Rickland Orchards was never able to gain traction in the marketplace. Under B&G Foods’ ownership, Rickland Orchards went from approximately $50 million in sales at the time it was acquired to a little over $15 million in the first half of 2014. Challenges facing the brand were numerous, including the fact it was not a well-known retail brand with a lot of shelf space. Rickland Orchards initially established its business in the warehouse/club channel. Additionally, competitors were able to copy the businesses’ line of products and undercut its price in warehouse and club stores.
In October 2014, a year after acquiring the brand, B&G Foods took an impairment charge of $22.2 million during the third quarter of fiscal 2014. The charge was primarily associated with the continued decline of the Rickland business. By the third quarter, Rickland Orchards was only generating $4.5 million in sales, and B&G Foods’ management said it did not expect sales for the brand to grow beyond that for the foreseeable future.