Green Giant Frozen Innovation Jolly Good for B&G Foods
Green Giant frozen vegetable product sales, driven by innovative launches late last year, proved to be a bright spot in an otherwise rather lackluster second quarter performance this year by B&G Foods, Inc. The retail rollout in Q4 2016 featured Veggie Tots that swapped potatoes with vegetables like cauliflower and broccoli. Also introduced were cauliflower-based Riced Veggies, Mashed Cauliflower and Roasted Veggies.
However, as net sales for the iconic American brand’s frozen offerings increased by $9.4 million in Q2 2017, the positive result was largely offset by a $7.6 million decrease in net sales of Green Giant shelf-stable products. This was primarily due to distribution losses among certain customers, along with increases in coupon and slotting expenses of $2.9 million, and slippage in net sales of non-branded bulk IQF products of $0.9 million.
While overall Q2 net sales of $368.1 million were up 20.2% for the Parsippany, New Jersey, USA-headquartered diversified food company, net income of $22.1 million fell by 27.1%. Adjusted net income of $27.6 million amounted to a 23.4% downturn, and adjusted diluted earnings of $0.41 per share logged a decrease of 28.1%.
“The second quarter of 2017 was a difficult one, as we continued to struggle with the many challenges facing our industry,” said B&G Foods President and CEO Robert C. Cantwell.
On a positive note, he added: “We doubled the size of our company with our last three acquisitions, and all are performing above expectations. While the current consumer environment remains challenging, we believe that bolstered by our recent acquisitions, there is a significant amount we can do to grow our overall business in both the near and long term.”
Among those acquisitions, Green Giant was purchased along with the Le Sueur premium canned vegetable brand from Generals Mills in 2015 for $765 million in cash plus an inventory adjustment of approximately $58 million.
Cantwell is enthusiastic about future prospects for expansion in the retail frozen food sector.
“We're really excited about a launch that we'll announce in September for delivery in January in the frozen space that nobody else is doing today,” he stated during an earnings call with investment analysts. “We're excited about our approach to innovation on Green Giant, which is, in a lot of ways, as simple as delivering vegetables in a format that the consumer wants to eat them today – not just as a side dish, but for use in recipes along with a side or use as a main meal altogether.”