ORLANDO, FLA. — B&G Foods, Inc. is prepared to purchase another business of Green Giant proportions.
The Parsippany, N.J.-based company, which bought the frozen vegetable brand from General Mills, Inc. for approximately $765 million just over a year ago, doubled its corporate infrastructure with the deal and “set ourselves to really continue an acquisition path in a big way,” said Robert Cantwell, chief executive officer and president of B&G Foods.
|Bob Cantwell, c.e.o. and president of B&G Foods.|
“Structurally from sales through operations through finance through just systems in the company, we’re set to be bigger,” Mr. Cantwell said during a presentation at the ICR Conference held Jan. 9-11 in Orlando. “We still believe that the right answer for B&G is to get bigger managing smaller things. That really differentiates ourselves against everybody else, but certainly, be ready to buy more things like Green Giant of that size, $500-plus million, because we’re certainly capable of doing that.”
This past November, B&G Foods finalized its second-largest acquisition to date with its purchase of the spices business of ACH Food Companies for approximately $365 million. A month later, the company bought Victoria Fine Foods L.L.C. for approximately $70 million.
“We want to be that company that not only can buy Green Giant tomorrow, but can continue to grow our business by buying smaller things like Victoria, which is a small pasta sauce business, and continue that uniqueness of who B&G is, to be able to put those kind of brands in our portfolio and manage them,” Mr. Cantwell said.
He added, “If there’s an acquisition out there that really fits B&G, we’re going to be ready. We’re ready for it today. We’d prefer a little time just to absorb everything we have, but we’re not going to lose out on an acquisition that’s an absolute fit for B&G today.”
The company also is going to be much more “aggressive” in product innovation in the year ahead to remain competitive and current with consumer trends, Mr. Cantwell said.
“We’ve seen that in Green Giant in a big way,” Mr. Cantwell said. “The innovation we launched here really in the fourth quarter from riced veggies to veggie tots, etc., have really moved the needle and really helped Green Giant. And we see that really performing in a big way in 2017 and really, that’s a consumer change dynamic in what they’re eating.
“It has surprised me how well riced vegetables has done. Riced cauliflower has really moved the needle for us. It’s a high price point for the consumer, but it’s turning off the shelf as fast as we can put it on the shelf. So we see a lot of upside potential and we need to take that learning through the rest of our dry grocery.”
One business in particular in need of resuscitation is Ortega, the company’s Mexican food brand.
“It used to be our largest brand not that long ago, Ortega,” Mr. Cantwell said. “It’s a little over $150 million in sales. That has been flat to declining a little bit here in the last couple of years for various reasons, some very strong competition in shelves and kits from the major competitor. We need to get that on a growth trend.
“That brand has some real upside potential, and we need to move the needle. And just moving that needle to a positive really absorbs a lot of any smaller shortfalls on a lot of our small regional brands.”
Other brands in focus include Pirate’s Booty snacks, Bear Creek dry soup mixes and Mama Mary’s pizza crusts.
“We need to continue to move the needle on those,” Mr. Cantwell said.
“And we're concentrating quite a bit on what I call our heritage brands, for lack of a better word, of brands that have been around for a long time,” he added. “A lot of them are regional in nature; a lot of them are Northeast in nature, that have generally been declining with consumer trends. And getting those closer to flat would be a big benefit to B&G overall.”