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Deal includes brand, equipment, but no plants or workers. Production to move to Orrville, Wisconsin
By Betty Lin-Fisher
Beacon Journal business writer
Published on Thursday, May 15, 2008
The J.M. Smucker Co. is spreading further into the jams and jellies category.
The Orrville company is acquiring the Knott's Berry Farm food brand from ConAgra Foods Inc.
The maker of Smucker jams and Jif peanut butter did not disclose details of the transaction, but said the acquired business was expected to add about $40 million in annual net sales for Smucker.
Knott's Berry Farm produces and markets jams, jellies, preserves and gift boxes in the retail and food-service industries. The acquisition does not include the Knott's Berry Farm Amusement Park in California, which is owned by Cedar Point's parent company, Cedar Fair.
''It's definitely one of the icon food brands, primarily with a rich history on the West Coast. We're excited to add it to the family,'' Smucker Director of Corporate Communications Maribeth Badertscher said on Wednesday.
The Knott's Berry Farm acquisition continues a strategy by Smucker to grow through new products and purchases. Since 2001, Smucker has scooped up through acquisitions such iconic brands as Jif, Crisco, Pillsbury, Hungry Jack and, last April, Ea
gle Brand condensed milk. In March, the company acquired Europe's Best Inc., a private company headquartered in Montreal, Quebec.
The newest agreement is for Smucker to purchase the brand and manufacturing equipment from Knott's Berry Farm. No plants or employees will be acquired by Smucker.
The production of Knott's Berry Farm products will move within four months to Smucker's Orrville and Ripon, Wis., plants, which already produce jams and jellies, Badertscher said.
ConAgra spokesman Jeff Mochal said its plant in Placentia, Calif., would close this year, with a loss of about 90 jobs.
ConAgra Chief Executive Gary Rodkin said the company, which includes brands such as Chef Boyardee, Healthy Choice and Orville Redenbacher's, could not give the Knott's Berry Farm product line the ''attention it needs to grow.''
The acquisition is a good fit for Smucker, said Wall Street analyst Jon Andersen of William Blair & Co. in Chicago.
''It fits Smucker's focus on retail branded products at the center of the store. It gives them additional clout in that aisle and it should be an acquisition in which they can what I call 'bolt on' and realize some nice synergies,'' Andersen said.
It also makes sense for Smucker not to take on Knott's manufacturing plant or employees since Smucker already has the facilities and distribution channels to make the products, he said.
''This is taking a strong brand and potentially making it stronger and doing so without very much incremental expense,'' Andersen said.
The company did not comment about its plans for distributing new products, but Badertscher added, ''We look forward to using our brand-building capacity to further enhance the position of an already well-known brand.''
Knott's Berry Farm has about 50 to 60 products for distribution, she said.
A limited selection is available at area Giant Eagle stores, she said. The product will also be available at the J.M. Smucker Co. Store and Cafe in Orrville, which features many Smucker brands that aren't readily available in the area.
Smucker has been smart about its acquisitions of brands, growing them and promoting them heavily, which increases sales for the company and its retailers, said Jim Trout, vice president of merchandising and sales for Acme Fresh Markets. Trout said he did not believe Acme carried Knott's products, except possibly in some specialty categories.
But he praised Smucker's acquisition strategy.
''They've been very savvy in going out there and finding brands that are declining. They buy the brand and bring the brand energy and promotion,'' Trout said. ''So far, I think they've made excellent decisions.''
The Associated Press contributed to this report. Betty Lin-Fisher can be reached at 330-996-3724 or blinfisher@thebeaconjournal.com.
The J.M. Smucker Co. is spreading further into the jams and jellies category.
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