Bimbo closes on Beefsteak acquisition
by Eric Schroeder
MEXICO CITY — Grupo Bimbo S.A.B. de C.V. has completed its $31.9 million purchase of the Beefsteak brand from Hostess Brands, Inc., Irving, Texas. The transaction was funded with cash holdings.
“Beefsteak is one of the largest volume selling rye breads in the United States and has a strong, established presence in the Midwest and Mid-Atlantic regions, offering B.B.U. (Bimbo Bakeries USA) a significant opportunity for national expansion,” Grupo Bimbo said.
Beefsteak has been sold out of Hostess’ facilities in Biddeford, Maine, and Hodgkins, Ill. The brand is distributed to a diversified customer base, including Wal-Mart Stores, Inc. and Stop & Shop.
According to data from SymphonyIRI Group, a Chicago-based market research firm, Pepperidge Farm was the top-selling rye/pumpernickel bread brand with dollar sales of $59,480,520 and unit sales of 16,449,590 in the 52 weeks ended Dec. 23, 2012. Beefsteak was No. 2, with dollar sales of $49,231,140 and unit sales of 14,549,510. Bimbo Bakeries Oroweat rye bread had dollar and unit sales of $35,616,460 and 8,653,711, respectively, during the 52-week period, while the company’s Arnold brand had dollar and unit sales of $19,906,980 and 5,892,291, respectively. Bimbo’s third largest rye brand, Levy’s, had dollar and unit sales of $12,878,340 and 3,511,888, respectively, in the period.
Overall, the rye/pumpernickel bread category generated dollar sales of $280,174,100 in the 52 weeks ended Dec. 23, 2012, according to SymphonyIRI.
In early January, Thomasville, Ga.-based Flowers Foods, Inc. was selected as the stalking horse bidder for the Beefsteak bread brand in a transaction that would have carried a purchase price of $30 million but would not have included facilities or additional assets. But in late February Grupo Bimbo stepped forward with its $31.9 million bid for the business.