The maker of household ingredient staples Eagle Brand sweetened condensed milk and PET evaporated milk portrayed an optimistic view of the beleaguered food products sector as it looks to snap up unwanted brands that are being jettisoned by family-owned businesses and large corporations.
Paul Smucker Wagstaff, CEO of Eagle Foods, told Food Dive that his company is unfazed by growing consumer demand to eat healthier, and will focus its growth on selling snacks — a popular category with on-the-go consumers — and indulgent products with good flavor.
With small second- and third-generation families looking to get out of the food business and large CPG companies looking to sell brands that are slow-growing or don’t fit with their core operations, Wagstaff said there are plenty of opportunities to expand the two-year-old company he runs.
“This is a great time to be in the food space in that there are opportunities out in the marketplace, people are looking to sell products,” Wagstaff said. “Whatever fits our criteria, we’ll focus on it whether it's from a big company or a family company.”
Wagstaff, 47, founded Eagle Foods in December 2015 after he and his partners found investors. They purchased the Eagle Brand sweetened condensed milk and PET evaporated milk businesses from The J.M. Smucker Company where he was once president of its U.S. retail consumer foods division. The brands, which produce around $200 million in sales each year, give Eagle Foods a strong, reliable cash-flow that it can use to buy other businesses.
“That’s why it’s really important to have a really solid foundation, a business that you know has been around for a long time, that generates good cash flow and is stable,” Wagstaff said. “We’re a startup without some of the cash issues that startups can have.”
Last August, Eagle took advantage of its cash stockpile to purchase G.H. Cretors popcorn from its fifth-generation owners whose ancestors invented the popcorn machine in 1885.
The snacks, available in flavors such as cheese corn, caramel and a mix of the two flavors, tout their use of real ingredients such as aged cheddar cheese, fresh creamery butter and caramel made by hand in copper kettles. The popcorn currently garners most of its sales in club stores such as Costco and Sam’s Club but also is available in Target, Meijer and Albertsons.
“We’re trying to be the time when you want to treat yourself, you want a snack and you want to have one that is high quality and great tasting and has the real ingredients, simple ingredients,” Wagstaff said. “That’s where we fit in and I don’t see that space declining.”
Even as Wagstaff remains on the lookout for brands to add to Eagle Foods' portfolio, he said the company's future involves an exit strategy — either through an initial public offering or by placing itself in a rather familiar position: putting itself up for sale to another company or private equity group.
“There will be an exit at some point,” he said. “One of those scenarios is likely to happen.”