Hormel Foods of Austin, Minn., whose signature Spam product leads a wide array of retail meat offerings, announced Thursday that it is spreading itself into the peanut butter grocery aisle with the acquisition of the 80-year-old Skippy brand.
The $700 million acquisition from Unilever, of Englewood Cliffs, N.J., "represents a significant opportunity for Hormel Foods," Jeffrey M. Ettinger, chairman of the board, president and CEO at Hormel, said in a statement announcing the deal. "It 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."
Ettinger also sees Skippy as enhancing the company's efforts overseas, adding, "The fast-growing international line will also strengthen our global presence and should be a useful complement to our sales strategy in China for the Spam family of products."
The transaction, which is pending regulatory approval, includes Unilever's Skippy production sites in Little Rock, Ark., and in China's Shandong province, Unilever said.
Skippy has counted among its commercial endorsers baseball star Derek Jeter and onetime Mousekateer Annette Funicello. Norman Rockwell once illustrated Skippy's print advertisements.
The Skippy domestic line, first introduced in 1932, offers 11 varieties of peanut butter products.
Peanut butter is a $2 billion business, with 74 percent of American households as buyers, making it the second-most popular sandwich in the United States behind ham.
Among peanut butters, only Jif sells more domestically. Peter Pan is third.
Internationally, Skippy is the leading brand in China and is sold in more than 30 other countries on five continents.
Total annual sales are expected to be about $370 million, with nearly $100 million of those sales outside the United States.
The food side of Unilever accounts for more than a quarter of its revenue and still includes brands such as Hellmann's mayonnaise and Ragu pasta sauce. Its other brands include Ben & Jerry's ice cream, Dove soap and Lipton and PG Tips teas.
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