Hormel Foods stuck on Skippy Peanut Butter
AUSTIN, Minn. — Hormel Foods will acquire the iconic peanut butter brand Skippy from Unilever for approximately $700 million.
Hormel, known for its chili, ham and pork products, looks to balance its portfolio with the non-meat protein product. With peanut butter in a $2 billion category with a 74% household penetration, as well as the second most popular sandwich behind ham in the United States, Hormel will be in a good spot to grow its domestic and global brand presence.
"The acquisition of the Skippy peanut butter business represents a significant opportunity for Hormel Foods. It allows us to grow our branded presence in the center of the store with a non-meat protein product and it reinforces our balanced portfolio," said Jeffrey M. Ettinger, chairman of the board, president and CEO at Hormel Foods. "The fast growing international line will also strengthen our global presence, and should be a useful complement to our sales strategy in China for the Spam family of products."
Skippy’s total annual sales are expected to be approximately $370 million, with nearly $100 million of those sales outside the United States. Hormel Foods expects this acquisition to be modestly accretive in fiscal 2013. Full-year accretion in fiscal 2014 is expected to be between 13 and 17 cents per share.
First introduced in 1932, the Skippy domestic line includes 11 varieties of shelf-stable peanut butter products. Internationally, Skippy is sold in more than 30 other countries on five continents, and touts itself as the leading peanut butter brand in China.