Hormel Foods to Buy Skippy Peanut Butter for About $700 Million

Skippy Peanut ButterBy CANDICE CHOI and MICHELLE CHAPMAN

(UPDATED, 9:46 a.m.) NEW YORK -- Hormel Foods (HRL) apparently has a hankering for a peanut butter and bacon sandwich. The company primarily known for Spam and other cured, smoked and deli meats said Thursday that it's buying Skippy, the country's No. 2 peanut butter brand, for about $700 million.

Skippy, which was introduced in 1932 and is a staple in American pantries, is intended to increase Hormel's presence in the center of the supermarket where shelf-stable foods are sold. It also gives the Austin, Minn.-based company a clearer path for growth overseas. Skippy is sold in about 30 countries and is the leading peanut butter brand in China, where Hormel is also looking for growth.

Hormel, which also makes canned chili, sausages and pepperoni, currently gets the vast majority of its sales in the U.S., with only about 4 percent of revenue coming from abroad. Although swings in peanut butter prices has made growth volatile, sales on average have increased about 4 percent annually on a normalized basis, according to a spokesman for Unilever (UL), which currently owns the brand.

In the U.S., the Skippy line consists of 11 varieties of peanut butter, including Skippy Natural. Hormel noted that Skippy is the leading brand in the faster-growing subcategory of natural peanut butter. It estimated peanut butter as a $2 billion category.

Hormel expects annual Skippy sales of about $370 million, with almost $100 million of that from outside the U.S. The deal includes Skippy manufacturing plants in Little Rock, Ark., and Weifang, China. Hormel Foods Corp. said that it expects the deal to modestly add to its fiscal 2013 results and add 13 cents to 17 cents per share to fiscal 2014 earnings.

The transaction, which still needs regulatory approval, is expected to close early this year.

Unilever, based in the Netherlands and the U.K., is one of the largest consumer products companies in the world. It makes Vaseline, Dove soaps and Lipton tea. The company had indicated last year it was considering selling Skippy as part of a strategic review.


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21 Comments

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Dodd_Walsh

Not news

January 07 2013 at 9:05 AM Report abuse rate up rate down Reply
Dodd_Walsh

Now they will outsource Skippy Peanut

January 07 2013 at 9:05 AM Report abuse rate up rate down Reply
Dodd_Walsh

Now they will outsource Skippy Peanut jobs to China

January 07 2013 at 9:05 AM Report abuse rate up rate down Reply
RUDY

so glad to know they also manufacture it CHINA.
NEVER AGAIN WILL i BUY THAT PEANUT BUTTER

January 04 2013 at 12:53 PM Report abuse rate up rate down Reply
RUDY

and corporations say they can't afford to hire
but they , as this one did, buy up other corporations (name brands) for MILLIONS.

January 04 2013 at 12:51 PM Report abuse rate up rate down Reply
hedunlap

What's the #1 brand of peanut butter? Better not be JIF, it taste like crap.

January 04 2013 at 12:23 AM Report abuse rate up rate down Reply
Tim

Maybe they'll get rid of the partially hydrogenated oil in the peanut butter now.

January 03 2013 at 10:28 PM Report abuse rate up rate down Reply
maydanal352

JIF is better

January 03 2013 at 10:28 PM Report abuse rate up rate down Reply
DJD10ec

Spam and Skippy? EEEEWWWWWWWWWWWWW

January 03 2013 at 10:12 PM Report abuse rate up rate down Reply
DJD10ec

Spam and Skippy? EEEEWWWWWWWWWWWWW

January 03 2013 at 10:12 PM Report abuse rate up rate down Reply