Hebrew National could soon answer to a different authority.
Conagra CAG -1.34%
Brands Inc. is in talks to sell the famous hot dog brand to the Brazilian JBS SA,
said people familiar with the matter.
A deal, which people say could also include the Egg Beaters and Odom’s Tennessee Pride brands, could be valued at around $ 700 million. Any deal is likely to be a few weeks away and Conagra could end up keeping the business or selling it to someone else, the people warned.
Conagra in April 2019 said Hebrew National’s sales for the previous year were $ 170 million and Egg Beaters’ were $ 78 million. But the popularity and cultural cache of the kosher hot dog transcends the size of the brand, thanks in part to its long-standing slogan, “We answer to a higher authority.”
Conagra, which has a market value of about $ 17.6 billion, has been restructuring its portfolio to boost its frozen food and snack brands like Healthy Choice and Slim Jim.
For JBS, the largest U.S. beef processor, Buying the business would expand its reach to grocery cartons of meat at a time when consumers have shifted their food buying preferences to supermarkets and away from table restaurants.
JBS has a market value of more than $ 12 billion and draws most of its revenue from the US, where its businesses include pork and beef processing company Swift and Pilgrim’s Pride.,
the second largest chicken supplier in the country.
Should JBS close the deal, it would expand its portfolio of consumer brands, which the company intends to build. Branded meat products tend to generate higher profits than bulk meat sold to restaurants and supermarkets in shrink-wrapped trays. In February 2020, JBS announced a $ 238 million deal to purchase Empire Packing Co., parent company of Ledbetter-brand retail meat products.
Hebrew National’s kosher franks were first sold in New York City in 1905 and Conagra acquired the brand’s parent company in 1993. Over the decades, beef hot dogs have become a staple. at ballparks and cookouts in backyards.
As of early 2019, the brand’s sales lagged slightly behind the overall hot dog category, and Conagra executives said they planned to update their marketing and incorporate additional cuts of meat such as brisket.
Pantry staples sales spiked about a year ago as stay-at-home orders began in the early days of the pandemic, shaking up classics that had lost favor with consumers. Hebrew National’s retail sales increased 39% in the quarter ending May 31, Conagra reported.
But demand for some packaged foods has waned as people return to restaurants and offices, prompting companies to turn to deals to keep up with changing consumer tastes.
Kraft Heinz Co.
in February it agreed to sell its Planters nut business to spam maker Hormel Foods Corp.
for $ 3.35 billion. Like JBS, Hormel has focused its portfolio on high-protein food brands.
Rival Kraft Mondelez International Inc.
It has signed two small deals so far this year: It agreed to buy Gourmet Food Holdings, a popular cookie brand in Australia this week, and the remainder of Paleo chocolate bar maker Hu Master Holdings in January.
—Annie Gasparro contributed to this article.
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It appeared in the print edition of March 10, 2021 as ‘Conagra will sell national Hebrew to JBS of Brazil’.