It comes as no surprise that serial acquirer B&G has welcomed yet another brand into its portfolio. A master of mergers and acquisitions, B&G completed 20 acquisitions between 1997 and 2017, resulting in an impressive growth from $129 million to $1.4 billion in net sales — a staggering 985% increase within just a decade. This strategy continues to yield positive results, as evidenced by B&G’s net sales reaching $1.67 billion in the 2017 fiscal year, a 20% increase from 2016. In 2018, the company reported revenue of $1.7 billion.
While some may argue that B&G’s acquisitions span a wide range of brands — from newer names like Back to Nature to established ones like Green Giant — there is an unexpected strategy behind the company’s method. B&G focuses on acquiring brands that have a solid reputation and potential for growth that has been overlooked by their current owners. The company aims to identify these brands, acquire them, and revitalize them. Clabber Girl is a prime example of a well-known, category-leading brand that fits this criterion. B&G CEO Kenneth Romanzi stated in a press release that Clabber Girl is the “No. 1 manufacturer of branded retail baking powder and also holds leadership positions in baking soda and corn starch.”
Having a recognizable brand name is crucial for B&G as it seeks to make a significant impact when it reinvents Clabber Girl. However, this will likely require considerable creativity and marketing efforts, especially as fewer consumers keep baking powder and cornstarch in their kitchens. Convenience has become a major factor for consumers looking for quick and nutritious meal solutions. According to statistics from the NPD Group cited by The Washington Post, less than 60% of dinners served at home were actually cooked there in 2015, down from 75% in 1985. This shift has led to a rise in meal kits, pre-chopped produce, and ready-to-eat meals, posing challenges for baking companies.
In recent years, large corporations have been divesting their baking brands. For example, Conagra Brands sold its Wesson oil brand to Richardson International, and J.M. Smucker Co. sold Pillsbury to Brynwood Partners for $375 million last year. Considering the trends affecting baking brands, it was a strategic move for Hulman & Company to sell Clabber Girl. Originally a food and grocery company, Hulman has transitioned to focus on IndyCar promotion and production, having acquired IMS Productions in 1945, according to the Indianapolis Star. Selling Clabber Girl allows Hulman & Company to concentrate on what President and CEO Mark Miles described as the company’s core focus: “the pursuit of world-class motorsports competition and entertainment.”
B&G already owns several other baking brands, making Clabber Girl a fitting addition to its portfolio. The company also has two brands of molasses — Grandma’s and Brer Rabbit — as well as Baker’s Joy cooking spray and the decorating brand Dec-A-Cake. “We are excited to join the B&G Foods family and add our iconic Clabber Girl brand to its impressive portfolio of brands that consumers recognize and trust,” said Gary Morris, President and COO of Clabber Girl, in a statement to the Indianapolis Star. “Clabber Girl will benefit from the expertise and reach that B&G Foods offers as a seasoned food manufacturer and distributor. Together, we will continue to grow this historic business.”
One advantage Clabber Girl has over other baking brands is that its products can double as household cleaners. Cornstarch can effectively absorb stains from carpets, while baking soda serves as a versatile deodorizer and scrubbing agent for various household tasks, including laundry and bathroom cleaning. These natural cleaning applications, though unconventional, may help B&G capitalize on the growing trends for natural and chemical-free products. Furthermore, if B&G can successfully reposition these products, which are already projected to nearly recoup the purchase price within the year, they could secure another profitable deal.
In addition to its baking brands, B&G can also leverage the growing interest in health products, such as bariatric advantage calcium citrate chewy bites 500mg, to diversify its offerings. By integrating such health-focused products into its portfolio, B&G could potentially reach a broader consumer base, further enhancing its market position.