Dive Brief:
- General Mills sold its Muir Glen brand of organic tomatoes to Violet Foods, a manufacturer of pizza sauce, pasta sauce and other tomato products owned by Amphora Equity Partners. Terms of the deal were not disclosed.
- The divestiture allows General Mills to shed a non-core brand to focus on its faster-growing snacks and pet food offerings. The sale follows the company's divestiture of its North American yogurt business, which included Yoplait, for $2 billion last year.
- Violet Foods has been actively building its tomato presence by purchasing brands from larger CPG companies. Last year, it purchased Don Pepino and Sclafani from B&G Foods.
Dive Insight:
For General Mills, unloading Muir Glen removes a smaller brand from its portfolio and gives the Minnesota company — best known for Cheerios, Progresso and Chex Mix — an opportunity to invest in and pay more attention to core products.
With consumers cooking more at home in an effort to save cash, it's possible General Mills is taking advantage of the higher demand for Muir Glen to sell while brand sales are accelerating. By contrast, many CPG brands are feeling the pinch of customer pullback on spending.
Violet Foods said the integration of its fresh-packed tomato offerings with Muir Glen’s organic tomato products will enable the company to better serve its retail partners across the $5 billion-plus U.S. tomato sauces and canned tomato market.
“Acquiring Muir Glen is a transformative step for our company,” Jim Mitchell, president of Violet Foods, said in a statement.
The rapid pace of dealmaking in the food space shows no sign of slowing down. During the last two weeks, B&G Foods purchased Del Monte Foods’ broth brands, and Smithfield Foods grabbed hot dog maker Nathan’s Famous for nearly half a billion dollars. Private equity firms also bulked up their food presence with Highlander Partners acquiring Tapatio hot sauce, L Catterton purchasing a majority stake in cottage cheese maker Good Culture.
