- B&G Foods bought Veggie Fries maker Farmwise Foods, the company announced Wednesday. Terms of the deal were not disclosed, but B&G said the acquisition was funded with cash on hand.
- The maker of Veggie Fries, Veggie Tots and Veggie Rings was founded in 2014 by CPG veteran Dave Peters and his wife Cristina. The family-based company makes allergen-free, vegetable-forward kid-friendly snacks, appetizers and blended chicken nuggets.
- Jordan Greenberg, B&G's executive vice president and chief commercial officer, said in a statement the company plans to support Farmwise's brands in the natural foods channel, but it will also be "introducing items that Farmwise has developed into new, innovative product offerings for our Green Giant brand."
It's apparent B&G has long had its eye on Farmwise Foods. Soon after B&G acquired Green Giant in 2015, it has worked to modernize the legacy vegetable brand's offerings, including a copycat line of Veggie Tots launched in 2016.
And while it makes sense that serial acquirer B&G wanted to add the trendy brand to its nearly 50 brand roster, it still seems a bit surprising. Farmwise appears to have been concentrating on pushing forward with its own offerings and fighting off the competition. Last year, Dave Peters told Food Navigator that Farmwise had "a lot of copycats we've been dealing with," and was working on patent and trademark protection around its Veggie Tots name and process. As of Thursday morning, Farmwise had a page on its website that compared nutritional information and ingredients for its Veggie Tots and Veggie Fries with similar offerings from Green Giant and Conagra's Birds Eye.
Farmwise also put out new innovative products with lines launched last August. Its appetizer line features vegetable-boosted restaurant staples like potato skins and mozzarella cheese sticks. And as large companies launched blended chicken products, featuring both real chicken and some plant-based protein, Farmwise made its own take on it: chicken nuggets blended with visible vegetables, including broccoli, carrots, potatoes and white beans.
All of this innovation may be exactly what B&G needs. Overall sales were slumping in the company's last quarterly report, but the drop was especially apparent for Green Giant. Net sales were down $6.1 million — or 4.9% — when compared to the year before. In a call with analysts, B&G CEO Ken Romanzi said poor crops, higher consumer prices and the timing of holidays contributed to this drop, but it was the first time in seven straight quarters that Green Giant hadn't shown growth.
The Farmwise acquisition is B&G's first since it bought the Clabber Girl baking ingredients brand for $80 million last May. It's a shrewd investment, not only because Farmwise is a proven innovator, but because it can help B&G get deeper into the frozen and healthy convenience foods space. While Green Giant has branched out with products like cauliflower pizza crust, riced veggies, veggie noodles and frozen protein bowls, these items don't specifically target kids. They also don't have the specific parent-friendly nutritional benefits that Farmwise versions have. And Farmwise gets into a segment not represented in B&G's pantheon of products: frozen snacks.
The biggest question this acquisition raises is how much overlap may come between the Green Giant and Farmwise brands. Considering Green Giant's push toward the veggies-into-appetizers spot that Farmwise started, it's unclear whether Farmwise Veggie Tots and Green Giant's Veggie Tots will coexist and use separate recipes. Beyond Veggie Tots, Farmwise's entire portfolio could conceivably become Green Giant products. Farmwise products are sold in thousands of grocery stores nationwide, but its brand recognition doesn't come close to that of Green Giant. And considering the investment Farmwise made in intellectual property as well as research and development, B&G may see this acquisition as the best way to get Green Giant back on the path to earnings green.