- Post Holdings is buying Peter Pan peanut butter from Conagra Brands for an undisclosed amount, the companies said in a statement. The deal is expected to close in the first quarter of 2021.
- Post and Conagra already have a history when it comes to the iconic peanut butter brand. Peter Pan products are currently co-manufactured by Post's 8th Avenue Food & Provisions.
- The purchase marks the latest in a series of deals in the food and beverage space in which CPG companies either add on smaller brands or jettison ones that are no longer fast-growing, at the top of their category or fit with the rest of their portfolio.
While Post Holdings is best known for its roster of cereal brands, such as Honey Bunches of Oats and Shredded Wheat, the St. Louis-based company has largely been built through acquisitions since it was spun off by private label owner Ralcorp in 2012. Since then, Post has added to the fold British cereal brand Weetabix, egg products maker Michael Foods, packaged food brand Bob Evans and ready-to-eat cereal producer MOM Brands.
Peter Pan peanut butter will now be part of that mix, giving Post a recognizable center-of-the store brand. These kinds of products have seen a resurgence during the coronavirus pandemic as consumers snack more and stock up on brands they know. Peanut butter remains one of the most popular spreads, with hundreds of millions of dollars in sales posted each year. Post is no stranger to the Peter Pan brand and likely needs to do little to integrate it, since Post's 8th Avenue Food & Provisions purchased Conagra's Illinois peanut butter facililty last year.
According to data from Statista, J. M. Smucker's Jif was by far the leading peanut butter brand in 2017. It had more than 30% of the market and nearly $600 million in sales — triple that of Skippy, the next largest brand. In data published last month, the data company asked consumers which brands of peanut butter they have eaten in the last 30 days. Jif, Skippy and store brands topped the list; Peter Pan came in fourth.
For Conagra, that ranking may have played a part in the company's decision to sell the brand. Conagra has significantly expanded its own presence in the frozen and plant-based segments with the $10.9 billion takeover of Pinnacle Foods in 2018. The deal added large well-known brands in those areas — including Birds Eye, Hungry-Man and Gardein — to its holdings.
Conagra may not have seen peanut butter as a category that could help it deliver meaningful sales increases. This isn't the only portfolio pruning the company has done. Conagra has also divested its private label peanut butter, Wesson oil and Lender's Bagels.
“Our strategy is to stay close to home in our core categories of frozen, grocery and snacks, and so in this regard, (Pinnacle) is very much right in our wheelhouse and arguably a large bolt on,” Sean Connolly, Conagra's CEO, said in 2018. “But scale-wise, access to the incremental platforms like vegetable, meatless, it is transformational and we’re excited about that.”
After several years of big deals, including Conagra buying Pinnacle, Campbell Soup's acquisition of Snyder's-Lance for $4.87 billion and Tyson's $4.2 billion acquisition of AdvancePierre, Big Food has recently concentrated on smaller deals to complement existing brands or bring companies into fast-growing segments. As companies look to reposition their portfolios, it's likely that opportunistic buyers like Post could come along and grab more brands like Peter Pan — a reliable, stable offering in a category that remains popular with snack-loving shoppers.