Hormel hasn’t introduced any new products yet, but the company could soon be pushing spam and peanut butter sandwiches. Hormel Foods Corp., the company that makes Spam, recently purchased the Skippy peanut butter brand from Unilever Plc for $700 million.
NBC News notes that the move is smart for both companies. Hormel has been struggling recently due to the rising cost of livestock, and Skippy will give the company a major non-animal based product. Skippy also has huge global appeal and will expand Hormel’s reach into new markets.
Hormel Chief Executive Jeffrey Ettinger said:
“(Skippy) allows us to grow our branded presence in the center of the store with a non-meat protein product and it reinforces our balanced portfolio.”
Janney Capital markets analyst Jonathan Feeney agreed, saying that Skippy will help Hormel “plug the gap” left by rising livestock prices.
Unilever has also been waiting to get rid of Skippy so that it can focus on some of its other brands like Hellmann’s.
The $700 million deal will put Skippy, the No.2 peanut butter brand in the United States, in Hormel’s portfolio. Hormel will also take control of Skippy manufacturing facilities in Little Rock, Arkansas and Weifang, China.
Fox 8 reports that Skippy currently has annual sales of about $370 million. Close to $100 million of that money comes from outside of the United States. Skippy is the No.2 peanut butter in the United States, behind Jif, but is the leading brand of peanut butter in China.
Are you ready for some spam and peanut butter sandwiches?