B&G buys SnackWell's and Back to Nature for $162.5M
- B&G Foods will purchase Back To Nature and SnackWell's snacks for $162.5 million from Mondelez and Brynwood Partners, according to a press release.
- The two better-for-you brands were a joint venture between the private equity firm and Mondelez. Both brands started out under the umbrella of Mondelez. Controlling interest in both brands was sold to private equity firm Brynwood Partners about five years ago, The Wall Street Journal reported.
- "Consistent with our acquisition strategy and our recent Green Giant, spices & seasonings and Victoria acquisitions, we are continuing to diversify our portfolio of brands and invest in brands and products that we believe are most relevant to today’s consumer,” B&G Foods President and CEO Robert Cantwell said in a statement.
B&G has been on a run of acquisitions lately, all in hopes of keeping the company innovative and profitable. With its most recent acquisitions of Green Giant, Victoria Fine Foods and the spices and seasonings segment of ACH Food Holdings, Cantwell said earlier this month that the company has doubled in size.
This latest acquisition brings more familiar brands into B&G's fold, but symbolizes a big challenge for the food manufacturer. When SnackWell's were first introduced in the 1990s, low-fat food was trendy, SnackWell's was a hot brand, bringing Mondelez's Nabisco about $490 million in 1995. But by 1998, the brand's sales had dropped precipitously, with consumers wary about its taste and competitors flooding the market.
During the last two decades, the brand has hung on to survival, though its market share has continued to fall. When announcing a 2015 push to clean up SnackWell's labels by getting rid of high-fructose corn syrup, partially hydrogenated oils and artificial colors and flavors, the brand brought in less than $22 million in a year, according to IRI.
Back to Nature, which offers a widely diverse product line ranging from granola to cookies to crackers, may be less of an outright challenge for B&G. While it has not seen the wild success and failures of SnackWell's, the brand has yet to become a success for any single product line.
According to The Wall Street Journal, both Back to Nature and SnackWells are worth $80 million in sales each year. Under Brynwood, the two brands got a new advertising contract with GKV last year.
Consumers are more interested in better-for-you and clean label brands than ever before. SnackWell's and Back to Nature fit in these categories, but are in need of some better innovation and marketing to speak to today's customer.
If any manufacturer can perk up these two brands, it's B&G. The company has a track record of innovating known brands that have lost their luster. After picking up Green Giant in 2015, B&G added several innovative products — including veggie tots and riced veggies — that have brought the brand to be one of B&G's most consistent money makers on earnings reports.
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