For years, Conagra was on an acquisition spree that not only included the $10.9 billion purchase of frozen food maker Pinnacle, which brought together Healthy Choice, Marie Callender’s, Birds Eye and Duncan Hines under one roof, but a series of smaller deals. In 2017, it purchased the makers of Duke’s meat snacks, Bigs sunflower seeds and Angie’s Boomchickapop, brands that complement its existing line of Slim Jim and David Seeds, as well as Orville Redenbacher’s and Act II popcorn.
Now in recent months Conagra has turned to pruning its portfolio to focus on its signature frozen offerings and snacks, two food categories that are experiencing strong growth that has accelerated during the pandemic.
Most recently, it announced the sale of its Peter Pan peanut butter to Post Holdings in December. Conagra also has divested its private-label peanut butter, Wesson Oil and Lender’s Bagels. A sale of Hebrew National, as well as other brands, would further narrow its focus while allowing it to jettison offerings like meat that have less overlap with the rest of its portfolio.
As consumers are spending more time at home snacking and preparing meals, Conagra would be picking an opportune time to sell a hotdog brand in Hebrew or breakfast offerings in Egg Beaters and Odom’s Tennessee Pride sausages. Breakfast has seen a newfound resurgence in the last year with fewer people commuting to work and having extra time to sit down for their first meal of the day.
JBS, which reportedly is trying again for a U.S. IPO, is best known for its processing operations in beef, pork and chicken. Adding brand names to the fold would give it a deeper store presence with well-known products, and could signal that it is aiming to further grow beyond its processing roots.
JBS last year purchased Empire Packing, the maker of Ledbetter-branded retail meat products, for $238 million. A move into name brands is coveted by meat processors because these products tend to carry higher profit margins than offerings sold in bulk to restaurants and other establishments.
Tyson Foods has taken a similar path to bulk up its name brands through acquisitions like Hillshire Brands, the maker of Jimmy Dean sausages, in 2014, and the creation of new brands like its plant-based line Raised & Rooted.
After years of dealmaking, food companies have shifted their focus to selectively adding and divesting brands to reposition their portfolios for growth or to unload products that are no longer core to their business.
In January, Mondelez International purchased Hu Master Holdings, a maker of premium snacks and chocolates. Hormel Foods said a month later it would purchase Kraft Heinz’s Planters snack nut portfolio for $3.35 billion. And Coca-Cola, which announced plans to discontinue Tab soda and Odwalla juice as part of a wider goal to eliminate an estimated 200 brands globally, also sold coconut water Zico.
As more companies emerge from the pandemic and have greater predictability into the outlook of their businesses and consumer trends, the pace of deals is unlikely to subside anytime soon.