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Hormel Foods intends to bring Planters out of its shell


Hormel Foods acquired Planters less than a year ago and has already put its stamp on the iconic brand.

Some updates were ripe for the picking – like Mr. Peanut’s new signature-approved “plant-based protein” seal, now displayed on its label.

It’s a seemingly simple and obvious addition. Of course, nuts are plant-based. Yet this is one of many changes Hormel planned for the brand that its previous owners could have made, but didn’t.

The Austin, Minnesota-based food maker completed its record $3.3 billion purchase of Planters from Kraft Heinz Co. in June and wasted no time lining Mr. Peanut’s pockets with marketing dollars.

“The company has big ambitions for the brand, really focused on a growth mindset,” said Rafik Lawendy, Marketing Director of Planters, who joined Hormel as part of the acquisition. “We are extremely excited about the resources the brand will get.”

Spectators agree that there is more value to be extracted from planters. The brand had gone stale despite ticking the box on several trends, such as high-protein diets and increased snacking habits.

“The Planters brand had really struggled under Kraft and lost significant market share – we believe Hormel will be able to turn things around,” said Rebecca Scheuneman, equity analyst at Morningstar. “Planters will be one of Hormel’s biggest brands, so it will receive quite a bit of marketing attention and support.”

Refreshed packaging is slowly hitting store shelves as part of a “soft conversion” – old labels are being used so they don’t generate waste, said Jeff Frank, Hormel Group vice president for groceries . New flavors and new products will be unveiled in the coming months. And last week Planters shot a Super Bowl commercial after Mr. Peanut missed the big game last year.

Hormel’s long-term challenge will be to sustain this growth for a brand already ubiquitous in crowded snack aisles – or any food segment planters might be trying to reach.

“How do we operate as a snack brand and expand from the nut aisle to different formats and outlets?” said Lawendy. “It’s our job to innovate and tell that story to consumers and be there with the right deals.”

First steps

Hormel’s largest acquisition in its 130-year history marks another step away from being a commodity company focused largely on raw agricultural products. For years, Hormel has worked to reposition itself as a branded food company. By adding some kind of value to products, profit margins and predictability tend to increase.

Company executives often bristle at being called a meatpacker. “We think of ourselves very much as a protein company,” Frank said.

The acquisition also brings greater distribution to places like convenience stores, where Hormel can more easily place its other snack brands alongside Planters products, Frank said.

“Snack businesses tend to be very good at savory, savory or sweet snacks – we have something in each of those spaces,” he said. “Planters really anchor our snack portfolio.”

The folding of planters in Hormel amid global supply chain outages added some headaches, although groundnut prices did not see the big increases experienced by other commodities during the year elapsed.

A new Hormel office is being established in Chicago, where planter management will be based. Planters’ production facilities in California, Arkansas and Virginia are now “part of Hormel’s supply chain,” Frank said, with the final touches of the integration still underway.

The Corn Nuts brand, which also accompanied the purchase of Planters, is now fully integrated and enjoys high level support.

“I’m a fan of a lot of Planters products; the usual Corn Nuts flavor tops the list,” Hormel CEO Jim Snee said at a Faegre Drinker mergers and acquisitions conference last fall. . “It has become a staple not only in the car but also in my office.”

Frank said “the team has become very aggressive around Corn Nuts”, with sales up 24% in the last quarter compared to the same period a year ago, before the acquisition.

Next steps

Once Hormel reaps the “low-hanging fruit” of rebuilding the brand, Edward Jones analyst John Boylan said he will observe how Planters competes with store brands over the long term.

“How can they reinvigorate growth in this category and ignite consumer enthusiasm for growers and the nut industry in general?” he said.

Lawendy said walnuts are expected to be trendy for years to come; it’s about convincing consumers that Planters are the “nuts of distinction”.

“Peanuts are a wonderful superfood that have a lot to offer from a snacking and sustainability perspective – they require very little water,” Lawendy said. “It’s the trifecta of snacking – something good, not super processed.”

This “vegetable protein” label is increasingly important for Hormel. For a company long known for spam, chili, bacon and turkey, non-meat products now account for 25% of Hormel’s sales.

Morningstar analyst Scheuneman said Hormel was eager to dig into the plant-based trend.

“It makes a lot of sense to them because per capita pork consumption has been declining in the United States as consumers become more health conscious.”


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