Spam, meet Skippy.
Hormel Foods Corp., maker of the famed meat, will buy the 80-year-old peanut butter brand from Unilever for $700 million, the company announced Thursday.
Unilever had been shopping Skippy since at least October as it continues to pare its food brands. In August, the company sold its P.F. Chang's and Bertolli frozen meals businesses to ConAgra Foods for $267 million.
Introduced in 1932, Skippy is the No. 2 peanut butter brand in the U.S., but has struggled to keep up with market leader Jif, which is owned by J.M. Smucker Co. Hormel framed the acquisition as a way to diversify its food portfolio while growing its international footprint.
"It allows us to grow our branded presence in the center of the store with a non-meat protein product and it reinforces our balanced portfolio," said Jeffrey M. Ettinger, chairman of the board, president and CEO at Hormel Foods. "The fast-growing international line will also strengthen our global presence, and should be a useful complement to our sales strategy in China for the Spam family of products."
According to Hormel, Skippy total annual sales are expected to be roughly $370 million, with nearly $100 million of that outside the U.S. Skippy is sold in more than 30 countries on five continents and is the top brand in China, Hormel stated. The marketer also noted that Skippy is the "leading brand in the faster-growing subcategory of natural peanut butter" and that "peanut butter is a $2 billion category with a 74% household penetration and is the second-most popular sandwich behind ham in the United States."
Kees Kruythoff, president of Unilever North America, said: "Skippy is an iconic brand with presence all around the world. As we continue to sharpen our portfolio to deliver sustainable growth for Unilever, we believe that the potential of the Skippy brand can now be more fully realized with Hormel Foods."
BBDO handles advertising for most Hormel brands. Under Unilever, Skippy advertising has most recently been at BFG9000, which has other Unilever food brands, including Wish-Bone and Ragu.