- Green Giant has been key to massive growth for B&G Foods in its first quarter. The company reported a 70% leap in net income last week to $33.2 million, while adjusted net income rose 88% to $38.6 million.
- B&G Foods' net sales soared 63% to $353 million. However, Green Giant contributed less revenue than executives anticipated after the brand delivered lower volumes.
- In addition to higher revenue and profit-driving synergies, Green Giant has also made B&G Foods more "meaningful" to customers and suppliers, such as doubling the company's business at Wal-Mart, Robert C. Cantwell, president and CEO of B&G Foods, said on an earnings call.
Green Giant has been a success in helping B&G Foods get some of its other brands into conversations with customers, Cantwell said. A high-profile brand like Green Giant lends credibility to a large but still growing company. B&G's other brands may now be seen as more valuable and competitive against massive competitors like Kraft Heinz or Green Giant's former owner, General Mills.
In October, not long after announcing the Green Giant acquisition, Cantwell confirmed on an earnings call that the company continued to be open to more acquisitions in the near future. One potential scenario? If Kraft Heinz decides to divest any of its underperforming brands, B&G could be first in line to scoop one (or a few) up.
B&G has said from the outset that Green Giant had been stagnant in terms of innovation when the company purchased it, and innovation would be the focal point of B&G's investment in the brand. Frozen foods will likely be the key segment to work on, as frozen food sales have faltered in recent years.
Green Giant is well-positioned in the frozen vegetables market, second in sales only to Pinnacle's Birds Eye brand. But as the Birds Eye franchise releases its own innovations, which contributed to 3.8% growth for Pinnacle's corresponding business segment in the most recent quarter, Green Giant will need to innovate fast to keep up and retain market share.
With Green Giant, B&G is also working to strengthen its reputation as a company that can turn around underperforming brands. B&G acquired seven companies in the past three years, though Green Giant, as an "iconic" brand, has been a particular source of excitement for the company, according to Cantwell.