US – Consumer Packaged Goods giant Conagra Brands may sell Hebrew National hotdog brand to beef processor JBS as part of a deal worth around US$700 million, The Wall Street Journal has reported
According to a report by WSJ, the transaction could also include other brands like Egg Beaters and Odom’s Tennessee Pride.
The talks are however non-binding and Conagra could end up keeping the business or choose to sell it to another company.
In recent months Conagra has turned to pruning its portfolio to focus on its signature frozen offerings and snacks, two food categories that are experiencing strong growth that has accelerated during the pandemic.
Most recently, it announced the sale of its Peter Pan peanut butter to Post Holdings and has also divested its private-label peanut butter, Wesson Oil and Lender’s Bagels.
JBS, on the other hand, is reportedly trying again for a U.S. IPO and an acquisition of a local brand will give it a greater selling point to US investors.
The company which is best known for its processing operations in beef, pork and chicken would also benefit from a deeper store presence.
A move into name brands is coveted by meat processors because these products tend to carry higher profit margins than offerings sold in bulk to restaurants and other establishments.
To increase its store presence, JBS last year purchased Empire Packing, the maker of Ledbetter-branded retail meat products, for US$238 million.
Tyson Foods has taken a similar path to bulk up its name brands through acquisitions like Hillshire Brands, the maker of Jimmy Dean sausages, in 2014, and the creation of new brands like its plant-based line Raised & Rooted.
JBS to set up new global company for plant-based products
Earlier, Bloomberg reported that JBS was also planning to set up a new global company focused solely on plant-based products.
JBS’s Chief Executive Officer Gilberto Tomazoni says the world’s population is booming and expected to reach 10 billion by 2050.
The amount of meat needed to satisfy the world’s protein needs won’t be possible to produce, said Tomazoni.
“Plant-based will help us to reduce this protein gap with more affordable products compared with animal protein, which will be more premium,” Tomazoni said.
“We see plant-based as an independent business in the future.”
Brazil-based JBS is just one of many sprawling, legacy food companies trying to up their meat-substitutes game as burgers and sausages made from plant proteins become mainstream.
Consumer demand has soared after startups like Beyond Meat and Impossible Foods popularized veggie burgers that imitate real beef.
Fast food restaurant like McDonald’s and Starbucks have added alternative meat items to their menus in response to rising demand.
JBS, like U.S. rival Tyson Foods Inc., entered the plant-based meat market in 2019, and regional teams across the globe developed products.
The new company which Tomazoni envisions would gather all those regional businesses in a global enterprise working towards gathering as much market share as possible.
The winner in plant-based “isn’t the business who made profits each year and captured 1% share of the market,” says Tomazoni.
“It’s the company who invested in making the best products and built the best brand.”
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