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Hebrew National will soon be able to respond to a different authority. Conagra Brands Inc. is in talks to sell the famous hot dog brand to Brazilian JBS SA, people familiar with the matter said.
A deal, which people said could also include the Egg Beaters and Odom’s Tennessee Pride brands, could be valued at around $ 700 million. Any deal is likely to take weeks and Conagra could end up keeping the business or selling it to someone else, people warned.
Conagra, in April 2019, said Hebrew National’s sales in the previous year were $ 170 million, and Egg Beaters, $ 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 respond to a higher authority.”
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Conagra, which has a market capitalization of around $ 17.6 billion, is reshaping its portfolio to boost its frozen and salty food brands, such as Healthy Choice and Slim Jim.
| Ticker | Safety | Last | Change | Change % |
|---|---|---|---|---|
| CAG | CONAGRA BRANDS INC | 36.04 | -0.49 | -1.34% |
For JBS, the largest beef processor in the United States, the purchase of the business would expand its reach to grocery store meats at a time when consumers have shifted their preferences from buying food to supermarkets and away from restaurants with a table.
JBS has a market capitalization of more than $ 12 billion and derives most of its revenue from the United States, where its business includes the beef and pork processing company Swift and Pilgrim’s Pride, the second largest supplier of beef and pork. country chicken.
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If JBS closes the deal, it will 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 plastic-wrapped trays. In February 2020, JBS announced a $ 238 million deal to buy Empire Packing Co., which controls the retail meat products under the Ledbetter brand.
Hebrew National’s kosher francs were first sold in New York City in 1905, and Conagra acquired the brand’s parent company in 1993. Over the decades, meat-only hot dogs have become a staple in baseball stadiums and backyard barbecues.
In early 2019, the brand’s sales were slightly behind the general hot dog category and Conagra executives said they planned to update their marketing and incorporate additional cuts of beef, such as brisket.
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Sales of basic products for the pantry increased about a year ago, when requests to stay at home began in the early days of the pandemic, taking a leap to the classics that had fallen out of favor among consumers. Hebrew National retail sales increased 39% in the quarter ended May 31, Conagra reported.
But demand for some packaged foods has declined as people have returned to restaurants and offices, prompting companies to resort to deals to keep up with changing consumer tastes.
In February, Kraft Heinz Co. 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 food brands heavy in protein.
Kraft rival Mondelez International Inc. 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 rest from chocolate bar maker Paleo Hu Master Holdings in January.