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As Parsippany-based B&G Foods Inc. continues a strategic review of core business units, it may sell off some or all of its brands in the frozen and canned vegetable space.

According to Chief Executive Officer and President Kenneth Keller, the company is ramping up efforts to reshape its portfolio. That includes evaluating a possible divestiture, either in a single transaction or a series of deals.

In a May 8 announcement, he said, “Green Giant remains a strong brand with broad awareness and distribution, and the frozen vegetables category is on trend with health and dietary trends. However, I believe the frozen vegetable business may not be the right fit with B&G Foods’ focus and capabilities, particularly since we have no plans to add more assets in the frozen portfolio given the opportunities in our core shelf-stable businesses and overall capital constraints.”

Keller also said B&G has been evaluating potential divestitures that “represent between 10% to 15% of the company’s consolidated net sales.”

Streamlining

After reorganizing itself into four business units in June 2022 – Spices & Flavor Solutions, Meals, Frozen & Vegetables, and Specialty – the company began a review of its portfolio to see which brands fit the goals set for each of the new divisions. B&G’s roster includes Crisco, Cream of Wheat, Dash and Ortega.

The company has divested assets recently to better focus on its operations and reduce long-term debt. In December 2022, B&G sold organic, plant-based snack brand Back to Nature to the Barilla Group for an undisclosed sum. 

Last November, Seneca Foods Corp., an Upstate New York packaged food manufacturer, acquired B&G’s Green Giant canned business. Financial terms of the deal were not revealed and the sale excluded Green Giant’s frozen products, its Canadian business and the Le Sueur premium canned veggies brand.

The divestiture came about eight years after B&G purchased Green Giant and Le Sueur from General Mills for $765 million, marking the company’s first entry into the frozen food segment.

Q1 results

The announcement that B&G is exploring additional sales was made along with the company’s latest quarterly results.

Net sales declined from $511.8 million in the first quarter of 2023 to $475.2 million in the first quarter of 2024. That outcome, the company said, was mainly due to the Green Giant shelf stable divestiture, a decrease in net pricing, impact of product mix and decrease in unit volume.

Each of the company’s four segments posted a drop in sales during the period from the same quarter a year ago:

• Frozen and vegetables fell 16.9%
• Spices and flavor solutions dipped 5.4%
• Specialty declined 4.9%
• Meals slipped 1.6%

B&G reported a net loss of $40.2 million, or $0.51 per diluted share, for Q1. That compares with net income of $3.4 million, or $0.05 per diluted share, for the first quarter of 2023.

The company also adjusted earnings and net sales projection for the year. It now anticipates sales guidance between $1.96 billion to $1.99 billion. That revises an initial forecast of $1.98 billion to $2.02 billion.

Keller said, “B&G Foods’ first quarter results demonstrated consistent margins and moderating inflation, with declines in net sales driven by foodservice trends and increased promotion spending. Volumes to retail customers were relatively flat. Going forward, we remain committed to driving low single digit growth and continuing to reduce leverage.”