B&G Foods is about to buy vegetable brands Green Giant and Le Sueur from General Mills for $765 million. The deal is expected to be finalized by the end of the year.
It seems like General Mills, that owns major brands like Cheerios and Yoplait, is looking for a change, and the cash will help them focusing on growing its business in other brands, categories and geographic areas with more potential. Bridget Christenson, the company’s spokesperson, said in an interview for USA TODAY that the company is focusing more on other categories such as cereal, yogurt and snacks.
This change of planes for B&G Foods is put on the change in consumers preferances. According to Jack Russo, an Edward Jones analyst, people nowadays go for fresher options in the produce aisle, and ignore more and more packaged, frozen and canned food. “General Mills is trying to get their portfolio more focused on health and wellness. They’re trying to do the best they can to reposition themselves.”, said Russo.
Green Giant was acquired by General Mills from Pillsbury in 2001, and produces net sales of around $585 million in fiscal year 2015. Le Sueur, originally a separate Green Giant brand, is also a part of the deal worth $765 million. For those who don’t know, Le Sueur sells premium canned vegetables, sharing the same name with the town in Minnesota where the brand was founded.
General Mills said it will continue to operate Green Giant in Europe and certain other export markets under license from B&G. But General Mills saw the gap that is growing in this industry and have decided to sell at a fair price, in our opinion. It remains to see where they’ll concentrate their attention and money next.
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