B&G Foods (BGS) Adds Farmwise to Its Robust Brands Kitty
B&G Foods, Inc. BGS is actively pursuing acquisitions to boost growth. In this regard, the company completed the acquisition of Wellesley, MA-based Farmwise LLC. B&G Foods funded the buyout in cash, while other terms of the transaction have been kept under wraps.
In sync with rising health consciousness, Farmwise is engaged in manufacturing healthy plant-based food alternatives, which include Veggie Fries, Veggie Rings and Veggie Tots. This is likely to help B&G Foods to augment its natural channel along with its growing Green Giant brand.
Speaking of Green Giants, it has emerged as one of the leading brands of the company. B&G Foods has a robust pipeline and product innovations lined up for Green Giant, which was acquired in November 2015. Notably, the company’s plan to introduce 11 frozen innovation products in the Green Giants portfolio is expected to have generated approximately $5-$10 million in incremental net sales in the fourth quarter of 2019.
Previously, B&G Foods acquired notable brands such as Back to Nature, Victoria, Mama Mary, Specialty Brands, Rickland Orchardsn, TrueNorth and McCann’s. Additionally, the acquisition of a leading baking products company Clabber Girl, which was completed in May 2019, has been yielding.
Apart from this, B&G Foods’ pricing initiatives have been aiding. During the third quarter, the company’s net sales gained $5 million from rise in net pricing. We believe that efficient pricing and the ongoing cost-saving efforts are likely to help it counter input cost inflation.
Incidentally, the Zacks Rank #4 (Sell) company has been battling increased inputs costs for a while now, owing to short agriculture crop season. Management had earlier expected input cost inflation to persist in 2019. Also, B&G Foods has been posting dismal sales for a while now. In third-quarter 2019, sales declined 3.9% year over year. This marked the fourth consecutive quarter of a sales decline. The Pirates Brands’ divestiture to Hershey HSY continued to negatively impact sales. In fact, the sale of Pirate Brands is expected to have hurt results in the fourth quarter of 2019 as well.
Shares of the frozen food and household provider declined 44.9% in the last year against the industry’s growth of 8.9%.
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