Eight years after buying Skippy Foods for $700 million, Hormel Foods could make its biggest acquisition to date if it shells out some $3 billion for the Planters brand from Kraft Heinz, as reported by The Wall Street Journal.
A deal between Hormel and Kraft Heinz could come next week, the Journal reported sources as saying. Neither company would comment to Marketing Daily.
The deal would mark the latest in a series of protein food category acquisitions by Hormel—the majority in refrigerated foods as opposed to snacks—and represent a huge boost in its snack presence.
To put a $3 billion price tag into perspective, Planters would fetch about three times the brand’s 2019 sales, per Wells Fargo data cited by the Journal.
Hormel bought Skippy from Unilever in 2013 for approximately $700 million. Its biggest purchase to date was Applegate Foods in 2015 for $775 million.
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The Planters brand has been a particular sore spot since the 2015 mega merger of Kraft and Heinz and ongoing rationalization of the combined companies’ brands.
According to Wells Fargo data, Planters' market share fell around 7 percentage points, to 18%, between 2016 and 2019.
With its brands found in 85% of U.S. households, Hormel has ramped up its marketing investments of late.
If Hormel acquires Planters, it will inherit a brand mascot whose future—given Mr. Peanut’s strange past year—is anyone’s guess.
Recall that during last year’s Super Bowl, Planters voluntarily killed Mr. Peanut in what would what quickly became a controversial move on social media following the helicopter death of basketball legend Kobe Bryant.
During the “funeral” spot—which is missing from Planters’ YouTube channel—Mr. Peanut emerged as a critter called Baby Nut.
In a January 2020 interview on CNBC, group creative director Mike Pierantozzi at Planters’ agency VaynerMedia said Mr. Peanut’s premeditated passing was connected to the phenomenon of how people mourn the deaths of fictional characters.
“You have to strike the perfect tone on this, or you really could end up with a problem,” said Pierantozzi. “So we definitely considered that. We’re very happy with the response we’re getting. We feel like we nailed the tone.”
Roughly three months later, Planters announced that Baby Nut had already reached the age of 21. That dovetailed with the brand’s partnership with Budweiser’s Natural Light for the debut of limited-edition Planters Natural Light Flavored Beer Peanuts.
Last week, Planters posted a 10-second video on YouTube saying that “Mr. Peanut is back,” accompanied by an image that looks more like Mr. Peanut than Baby Peanut.
On Monday, Planters said that in sitting out Super Bowl 2021, it’s redirecting “all $5 million of the Big Game budget” to a variety of “unsung heroes doing good in communities across the country.”