The Planters brand may be best known for peanuts, but for its new owner, Hormel Foods Corp.’s HRL, +0.12% $3.35 billion purchase of the portfolio of products from Kraft Heinz Inc. KHC, -0.42% is an investment in a growing snack lineup.
Read: Beyond Meat’s snack partnership with Pepsi is going to take a while to show results, analyst saysHormel’s portfolio of brands includes the namesake chili, bacon and other products, Spam and Dinty Moore. The Planters brands that were acquired contributed $1.1 billion in sales to Kraft Heinz in fiscal 2020, primarily in the U.S. segment, according to Kraft. It includes Nut-rition products, Cheez Balls and, of course, peanuts.
JPMorgan analysts say the acquisition makes “strategic sense” for Hormel. Moreover, the company expects accretion of 17 cents per share to 20 cents per share by fiscal 2022. “We’re renovating more than 40% of our portfolio,” Carlos Abrams-Rivera, U.S. Zone president at Kraft Heinz, told MarketWatch. He says the strategy is based on what they’re hearing from shoppers.“We’re changing the way we show up in the everyday lives of consumers,” he said.
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