Hormel Foods strikes $850m deal to buy premium deli meat brand Columbus

By Elaine Watson contact

- Last updated on GMT

Hormel Foods strikes $850m deal to buy premium deli meat brand Columbus
Hormel Foods has struck an $850m deal to buy premium deli meat and salami company Columbus Manufacturing, Inc from Chicago-based Arbor Investments.

"Columbus is capitalizing on one of the fastest-growing areas in the retail grocery store with premium, authentic products that are on-trend with today's consumers who are looking for unique experiences, flavors, and products,” ​said Hormel Foods president and CEO Jim Snee.

"The acquisition of Columbus will serve as a catalyst for uniting all our deli businesses into one customer-facing organization. This acquisition significantly enhances our scale in the deli by broadening our portfolio of products, customers, and consumers.

"The synergies we can unlock with this acquisition are clear."

Joe Ennen, CEO at San Francisco-based Columbus – which has annual revenues of c.$300m and is growing at around 5% year on year - added: "In Hormel we are joining an organization whose values and culture perfectly align with our own."

Columbus will continue to operate from its California base and will report into the refrigerated foods segment at Austin, Minnesota-based Hormel, which generates revenues of $9bn from brands including SKIPPY, SPAM, Hormel Natural Choice, Applegate, Justin's, Wholly Guacamole, and Hormel Black Label.

It doesn’t matter what category you look at​, consumers are trading up…

Speaking to FoodNavigator-USA last year​,​ Columbus CEO Joe Ennen said Columbus had had to constantly reinvent itself to stay ahead of the curve, while at the same time retaining its distinct heritage (it was founded in 1917 by Italian immigrants as the San Francisco Sausage Company and is now the #1 Italian deli meat company west of Mississippi, a top 10 deli brand nationwide, and one of the fastest-growing players in the category).

Joe-ennen columbus
Joe Ennen: 'We’ve seen great movement towards super premium products like ours that are traditionally made with old world recipes and methods'

 “I’ve been in the food business since the late 80s and back then, premium was all about taste and texture, but Millennials today have a more holistic definition. With meats, consumers are now thinking about how the animal was raised, how and where the product was made, about how clean the ingredients deck is as well as the taste, texture and quality of the products themselves.”​

He added: “It doesn’t matter what category you look at​, consumers are trading up… We’ve seen great movement towards super premium products like ours that are traditionally made with old world recipes and methods, so we’re trying to do for the meat business what craft beer did for the beer industry, which was a kind of reaction against these giant traditional brewers pouring tasteless swill down people’s throats.

“What we’re doing is very similar to what KRAVE tried to do, which is reimagine the categories where we operate, to think about the consumer that is NOT being satisfied with the products on offer, or not shopping the category at all. My question is how do we get this amazing product to people that wouldn’t touch it with a 10-foot bargepole?​”

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1 comment

Hormel's math???

Posted by Joseph Sabbagh,

How can Hormel come to a $850 mill buy on a company doing only $300 mill?

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