B&G Foods: ‘We are very, very good at executing on acquisitions’
Speaking at the Barclays Back to School conference in Boston, Wenner said B&G had grown sales from $379m in 2005 to $544m in 2011 through a stream of acquisitions of unloved brands often from larger players such as Kraft and Unilever that were unable to give them the attention they deserved.
He added: “We are very, very good at executing on acquisitions...
“What we're faced with typically includes a sales decline of some sort from the previous owner… We are in a lot of cases buying ‘orphan’ brands from larger food companies and then turning them around and not only stopping the sales decline but putting innovation into the brands to generate modest organic growth.”
B&G, which acquired Culver Specialty Brands from Unilever last year in a $325m deal, was typically competing with private equity buyers, he said: “The big food companies are not going to come out and compete for products like that. They can't use the formula that they have for managing brands when brands are smaller.”
The appeal of the dollar store: ‘If you get a hit, you're in 8,000 stores overnight’
B&G brands had had particular success in dollar stores in the past year or two, he said.
“We've had nice growth over the last year or so in dollar stores … when you think about it, there is very, very limited space in the dollar store. So you're fighting for very finite real estate. The good news is, if you get a hit, you're in 8,000 stores overnight.”
He added: “When we design products for these dollar stores, we're very careful about maintaining our margins. So in the case of Cream of Wheat where you would buy a 12-pack in a grocery store for $3.99, you can buy a three pack in a dollar store for 99 cents.
“The last thing we need is the Walmarts of the world going to a dollar store and seeing our products considerably cheaper than in a Walmart.”
