From the Publisher: Canning the Can?

Hormel Food’s acquisition of Applegate Farms is a sure sign of the changing times. Hormel Food’s purchase of Applegate Farms for about $775 million in late May is not the biggest acquisition amongst consumer packaged goods companies in recent times. However, it may be the most defining one to hit the industry in many years. Hormel, based in Austin, Minn., has made no secret of its intent to diversify into other segments of the food business. The company, once known primarily for Spam, Dinty Moore beef stew and deli meats, has made a concerted effort to move into the 21st century and attract those demanding Millennials that we are all constantly talking about. In 2013, it acquired Skippy peanut butter and last year the company made a big splash, turning a lot of heads with its acquisition of CytoSport, the maker of the Muscle Milk line of sports drinks, bars and powders. Lets get it out right here. Canned products are not the future. In fact, they are not even the present. Products like Spam do not quite make the grade anymore in a forward-thinking company’s future portfolio, not because they are not very good, but because more and more consumers want fresh, natural and organic ingredients from the products they feed their kids. Applegate Farms is a totally different story. The Bridgewater, N.J.-based company has quickly managed to grab the attention of those consumers willing to pay a little more for natural and organic products with a minimum of ingredients. According to an article in The New York Times, half of Applegate’s sales are through natural food stores and much of its sales are concentrated in the Northeast and parts of the West Coast. There is little doubt that Hormel’s top executives feel they can take this well-respected company and its tagline “all the great taste you want without the junk that you don’t” and start marketing it to mainstream supermarkets across the country, many of which are begging for more products that satisfy the aforementioned and elusive Millennials. However, Hormel CEO Jeffrey Ettinger and his team should not get carried away. They may have the money to purchase Applegate, but they certainly do not yet have the expertise to run their newest division without potentially screwing it up. They need to allow the people at Applegate to continue to run independently of the parent company and to do the things necessary to maintain the quality they are already known for. Trying to cutcorners to satisfy Wall Street will only help ruin a company and its reputation. Furthermore, do not think this is the end of Hormel’s acquisition binge. The company sees the future and there are a lot of other businesses out there that can fill a void and make it more attractive to younger consumers, with their high-level of disposable income and their strong desire to feed their families the best foods possible.