Hormel Foods acquiring organic meats producer Applegate for $775 million
Hormel Foods announced that it is acquiring Applegate, one of the country’s leading producers of natural and organic meats, for $775 million.
The move is set to expand Hormel’s presence in the organic-meats category.
The acquisition represents the change in US consumer eating habits, which is shifting to protein-heavy diets and healthier organic options.
Hormel Foods has been diversifying its portfolio of food brands for the past few years in response to changing consumer eating habits. For example, last year Hormel Foods acquired CutoSport Holdings Inc., maker of Muscle Milk-brand protein shakes and powders, for $450 million.
With Applegate under its wing, Hormel Foods has has a shot at luring a new customer base seeking organic meats, which Applegate says are “raised humanely without antibiotics and hormones.”
“Over the last 28 years Applegate has brought transparency and clean ingredients to American favorites and classics like hot dogs, bacon and deli meat,” said Stephen McDonnell, founder of Applegate.
”It was my mission from the start to change the way we think about meat – how it’s raised and produced – and this agreement is definitely a continuation of that mission.”
Kerry Collins, the company’s current CEO, will continue in her role for the next several months.
“Applegate’s consumers won’t see any changes. Our products, standards, mission and focus will remain the same. We’re going to continue to make noise to change the food system for the better.”
Applegate currently works with almost 1,800 family farms and with Hormel Foods as a partner it can now expand on a much wider scale, with access to more resources being a huge opportunity for growth.
Applegate will operate independently as a stand-alone brand within Hormel. It will continue to be based in Bridgewater, New Jersey. Applegate’s annual sales are expected to reach $340 million in 2015
Hormel shares increased 3.3 percent to $58.50 in extended trading hours.