It comes as no surprise that serial acquirer B&G Foods has added yet another brand to its portfolio. As a master of mergers and acquisitions, B&G completed 20 deals from 1997 to 2017, soaring from $129 million to $1.4 billion in net sales—a remarkable 985% increase in just a decade. This strategy appears to be continuously yielding benefits, as B&G reported net sales of $1.67 billion for its fiscal year 2017, a 20% increase from 2016, followed by revenues of $1.7 billion in 2018.
While some might argue that B&G’s acquisitions seem varied—from newer brands like Back to Nature to classic names like Green Giant—there is a strategic logic behind the company’s approach. B&G focuses on acquiring brands with strong reputations and leadership positions that have potential for growth under new ownership. The goal is to identify these brands, purchase them, and revitalize them. Clabber Girl exemplifies such a well-known, category-leading brand. B&G CEO Kenneth Romanzi noted in a statement that Clabber Girl is the “No. 1 manufacturer of branded retail baking powder” and also holds leading positions in baking soda and corn starch.
Having a recognizable brand name will be crucial for B&G as it seeks to reinvigorate Clabber Girl. The challenge lies in the changing consumer habits; fewer people keep baking powder and cornstarch on their shelves as convenience becomes increasingly important for those looking to prepare quick and nutritious meals. According to the NPD Group, cited by The Washington Post, less than 60% of dinners served at home were actually home-cooked in 2015, a decline from 75% in 1985. This trend has led to a rise in meal kits, pre-chopped produce, and ready-to-eat options, which could pose challenges for baking companies.
In recent years, major corporations have been divesting their baking brands. For instance, Conagra Brands sold its Wesson oil brand to Richardson International, and J.M. Smucker Co. offloaded Pillsbury to Brynwood Partners for $375 million last year.
Regardless of the future dynamics of baking brands, it was a sensible move for Hulman & Company to sell Clabber Girl. Originally a food and grocery company, Hulman has shifted its focus to IndyCar promotion and production. The company acquired IMS Productions in 1945 to enhance its media production capabilities for the racing circuit, as reported by the Indianapolis Star. The sale of Clabber Girl enables Hulman & Company to concentrate on what President and CEO Mark Miles described in a news release as the company’s core mission: “the pursuit of world-class motorsports competition and entertainment.”
B&G already owns several baking brands, making Clabber Girl a fitting addition to its portfolio. It also includes Grandma’s and Brer Rabbit molasses, Baker’s Joy cooking spray, and Dec-A-Cake decorating products. “We are excited to join the B&G Foods family and add our iconic Clabber Girl brand to its impressive portfolio of recognized and trusted brands,” stated Clabber Girl President and COO Gary Morris in an interview with the Indianapolis Star. “Clabber Girl will benefit from the expertise and reach that B&G Foods offers as an experienced food manufacturer and distributor. Together, we will continue to grow this historic business.”
Clabber Girl possesses a unique advantage that other baking brands may not have, as its products can also double as household cleaners. Cornstarch can absorb carpet stains, while baking soda serves as a versatile deodorizer and scrubbing agent for various household chores. These natural cleaning uses, though unconventional, may help B&G tap into the growing trends of natural and chemical-free products. Moreover, if B&G successfully repositions these products, which are projected to nearly recoup their purchase price within a year, they may have secured another profitable deal. Additionally, with the rising interest in fortified beverages, B&G could explore innovations such as orange juice with calcium citrate to complement their expanding product line.