“We expect to see continued strong demand for our products throughout the fourth quarter and into 2021,” Romanzi said, adding that the company expects to complete the $550m acquisition of Crisco from JM Smucker in the fourth quarter (the second largest acquisition in B&G Foods' history).
“Crisco is the number one brand of shortening, the number one brand of vegetable oil, and it also holds leadership positions in other cooking oils and sprays. Consistent with our acquisition strategy, we expect the acquisition to be immediately accretive to our earnings per share and free cash flow,” he said.
B&G Foods chief financial officer, Bruce Wacha, said he expects Crisco to generate approximately $270m of net sales in 2021.
Outside of anticipated strong growth from its baking platform, which includes Clabber Girl, Davis, Rumford, Grandma's molasses, and the company’s Pure Maple Syrup brands, B&G Foods saw net sales and market share increase in nearly two-thirds of its portfolio.
“Among our larger brands, net sales of Green Giant, including Le Sueur, increased by $37.9m, or 31.5%. Net sales of our spices & seasonings increased by $24.3m, or 29.5%. Net sales of Victoria increased by $6.3m, or 55.9%. Net sales of Maple Grove Farms increased by $3.2m, or 18.2%. Net sales of Cream of Wheat increased by $2.4m, or 17.2%. Net sales of Ortega increased $1m, or 3%. Net sales of all other brands in the aggregate increased $14m, or 11.1%,” reported Wacha during the company’s Q3 earnings call.
‘We believe many more consumers will be working from home even after a vaccine is available’
Heading into the fourth quarter of 2020 and next year, Wacha noted that the company expects lower, but still elevated, sales.
“While we don't expect to remain at the same plus 20% area growth rate, we do anticipate growth in the fourth quarter to remain elevated or up as much as 10% or more for net sales,” he said.
Romanzi, like some other CPG and retail leaders, believes that items such as baking ingredients, condiments, spices and seasonings, and [frozen] vegetables will remain a core purchase for consumers over the next year.
“We believe many more consumers will be working from home even after a vaccine is available. And we participate in good categories with well-known leading brands that caters very well to the work from home crowd,” noted Romanzi.
On the back of strong sales, the 131-year-old food company has also attracted new consumers, according to Romanzi.
“In the latest 12 months ending September 2020, 83% of US households purchased at least one B&G food product and that increased from 79% last year (equating to approximately 5.7m more households,” he said.
Cauliflower-focused product innovation
“Our focus will continue to introduce new products made from vegetables that offer delicious carbohydrate replacement alternatives to large carbohydrate filled categories such as pasta, rice, and bread,” said Romanzi.
Next year, the company plans to introduce a line of cauliflower based pastas, including ravioli, fettuccine, and mac and cheese as well as cauliflower taco shells and tortillas under the Ortega brand.
“Early retail movement in this first few retailers that launched these new items is very promising,” Romanzi added.
