Summary:
- B&G Foods has divested two of its tomato brands to a private equity company as part of its strategy to reduce debt and streamline its portfolio.
- Violet Foods, a newly established entity under Amphora Equity Partners, will take over B&G’s Don Pepino and Sclafani brands. Don Pepino is known for its pizza sauces, while Sclafani specializes in tomatoes and related products.
- The transaction also includes the acquisition of the manufacturing facility in Williamstown, New Jersey where these brands are produced. The financial terms of the deal were not disclosed.
Insight:
B&G Foods, known for its history of acquisitions, is now focusing on a different strategy. The company is actively reducing its portfolio to enhance its focus and alleviate its debt burden.
In recent years, B&G has sold its Green Giant canned business to Seneca Foods and its snacks brand Back to Nature to Barilla a year earlier. Additionally, the company is exploring the sale of the Green Giant frozen business.
The divestment of Don Pepino and Sclafani represents a strategic move within B&G’s extensive brand portfolio, which includes over 50 brands such as Ortega, Cream of Wheat, and Crisco. These brands operate in competitive markets for sauces and tomato products, facing challenges from both established brands and private labels. As consumers navigate economic uncertainties, demand for such products may see fluctuations.
During the company’s latest earnings call, CEO Casey Keller emphasized the importance of reshaping B&G’s portfolio to align with its strategic goals and risk management. Keller aims to establish a more focused B&G that can serve as a foundation for future growth through mergers and acquisitions in key business segments such as spices, Mexican cuisine, and baking essentials.