B&G Foods, the company that manufactures Crisco and Ortega products, is actively looking into divesting certain products from its portfolio as part of a strategic plan to optimize operations. This initiative aligns with the company’s aim to shed products that generate low margins or cash flow and to streamline its offerings. By focusing more intently on core business objectives, B&G Foods hopes to boost profitability and strengthen its market position over the long-term.
The process of divestiture, which involves selling off less profitable or non-core items, enables companies like B&G Foods to redirect resources towards products and brands that represent the strongest strategic fit and growth potential. Shedding underperforming or peripheral products allows management to concentrate energy and investments into the highest-margin, most promising parts of the business.
As of fall 2023, B&G Foods has completed the divestiture of two non-core businesses: the Back to Nature brand and the Green Giant US shelf-stable product line.
- Back to Nature: B&G Foods sold the Back to Nature brand to The Barilla Group in December 2022. The terms of the sale were not disclosed.
- Green Giant US canned vegetables: B&G Foods sold the Green Giant US canned vegetable business to Seneca Foods Corp. in January 2023. The sale was completed in the first quarter of 2023. The terms of the sale were not disclosed.
Another notable transaction was B&G Foods’ acquisition of the Crisco brand from the J.M. Smucker Company for $550 million, subject to adjustments. Crisco, renowned for its shortening and cooking oils, represents an established brand that aligns well with B&G Foods’ portfolio of shelf-stable products. The deal reflects B&G’s strategy of shifting resources towards prominent, profitable brands in its core categories.
With a history tracing back to 1911, when it was launched by Procter & Gamble as the first shortening made entirely from vegetable oil, Crisco maintains strong brand equity and consumer familiarity. Originally made from cottonseed oil, Crisco today encompasses a range of products including cooking sprays, olive oils, and other cooking oils like canola, corn, peanut, sunflower, and blended oils. Acquiring this iconic brand provides B&G Foods with a strategic asset to drive growth.
Key aspects of B&G Foods’ strategic divestiture plan include:
- Selling off less profitable or non-core product lines and brands
- Streamlining portfolio to focus on core business objectives and growth opportunities
- Redirecting resources towards the highest potential brands and products
- Recent examples such as sale of Green Giant canned vegetable business
- Acquisition of established brands like Crisco that align with core portfolio
- Enabling greater focus on most profitable, strategically-aligned products
By divesting peripheral products and acquiring strong core brands, B&G Foods aims to hone its portfolio over time. The company is reassessing its entire product range to determine which items may not meet financial criteria or strategic fit. This process allows B&G Foods to shape its business for optimal performance.
The strategic divestiture initiative is part of a broader push to strengthen B&G Foods’ financial and competitive position within the packaged foods industry. With margins facing pressure, the company is taking proactive steps to solidify profitability. This involves concentrating resources around productive brands and products with the highest return potential. Originally announced in late 2022, the plan of these non-core assets is a significant step in B&G Foods’ strategic plan to focus on its core businesses and improve profitability. The company is confident that this divestiture will create long-term value for its shareholders.