- B&G Foods announced Wednesday that it would acquire the spices business of ACH Food Companies, which includes brands like Spice Islands, Tone's and Durkee.
- The company also announced production growth via the acquisition of a manufacturing facility in Ankeny, IA, as part of the deal.
- B&G president and CEO Bob Cantwell said in a statement that the new purchases would be "immediately accretive" to earnings per share and free cash flow.
The industry has been waiting to see what brands or companies B&G was going to buy next because the company had been vocal about growth in this manner. B&G has a specialty for acquiring underperforming brands and staging a massive overhaul to turn around sales and perception of the brand.
Most recently, that success story is Green Giant, which has contributed to significant sales growth for the company. That includes a 58.2% leap in quarterly net sales in the most recently reported quarter. For this brand, B&G has namely focused on innovation and disruption within the canned and frozen vegetable category, most recently including a slew of new items that align with consumer health trends and flavor demands.
As for this latest acquisition, the brands give B&G a foothold in a new category: seasonings and spices. Spices are crucial to consumers who want more flavor but also health benefits and convenience. But spices can also evoke deep feelings of nostalgia if the right combination reminds consumers of family meals at home. McCormick has been innovating in the segment, including selling fresh prepared herbs to enter the produce aisle, but there is room for B&G to spruce up the category.
The company believes it will close the acquisition in the fourth quarter of this year.