PARSIPPANY, NJ. – B&G Foods, Inc. sees its resurgent fiscal 2020 performance rooted in two themes — necessity and rediscovery. The early days of the pandemic, when consumer mobility was limited and most consumer packaged goods purchases occurred at retail, B&G Foods’ sales surged. As lockdowns eased and mobility increased, consumers have stayed close to home and rediscovered the company’s portfolio of center-store brands.
“Our impressive growth in net sales across our portfolio was driven by a continuation of strong sustained consumption growth throughout the quarter,” said Kenneth G. Romanzi, president and chief executive officer, during a Nov. 5 conference call to discuss third-quarter results. “For the 13 weeks ending Oct. 3, as reported by Nielsen, the total B&G Foods portfolio consumption grew 18% versus last year.
“This was nearly 50% greater than the total packaged food growth rate of 12.4% for the same time period, keeping B&G Foods consistently among the fastest-growing publicly traded bulk packaged food companies in the US, both for the quarter and the entire period since the beginning of the pandemic.”
Net income for the quarter ended Oct. 3 rose to $46.8 million, equal to 73¢ per share on the common stock, and an increase when compared with the same period of the previous year when the company earned $31.1 million, or 48¢ per share.
Quarterly sales rose to $496 million from $406 million the year prior.
Nearly 60% of B&G Foods’ brands experienced double-digit sales growth during the quarter when compared with the same period of the previous year, said Bruce C. Wacha, chief financial officer. Green Giant sales rose 31.5%, seasoning and spices sales rose 29.5%, sales of Victoria branded products were up 55.9%, sales of Maple Grove products rose 18.2% and Cream of Wheat sales moved up 17.2%.
The sales increases have led to improved household penetration and management’s focus is now on ensuring those households keep coming back.
“We’ve been increasing our marketing investment and shifting those investments to more usage-oriented marketing with an emphasis on e-commerce,” Mr. Romanzi said. “Examples of our recent efforts include partnering with leading media companies to promote our brands and recipes on high-impact sites like delish.com and allrecipes.com. We have also launched an exclusive online interactive kitchen with a digital pantry and freezer, (specked) with our brand and a host of recipes, tips and tricks to make eating at home with the family easier and more enjoyable.”
Mr. Romanzi added that he expects B&G Foods to benefit from a more robust innovation pipeline that features new products scheduled for launch early in fiscal 2020, but delayed due to the pandemic and new products scheduled for launch in fiscal 2021.
“We’ve begun the rollout of Green Giant … cauliflower breadsticks,” he said. “In addition, we’ve begun the rollout of Green Giant cauliflower for our vegetable-based veggie fries and veggie rings, our take on traditional onion rings. And next year, we plan to introduce a line of outstanding cauliflower-based pastas, including ravioli, fettuccine and mac and cheese.”
The cauliflower theme will continue with the launch of Ortega cauliflower taco shells and tortillas.
“We will complement this launch with the introduction of Ortega Street Taco Sauces in three flavors, in squeeze bottles to capitalize on the growing food truck craze,” Mr. Romanzi said.
Net income for the first nine months of fiscal 2020 totaled $120 million, equal to $1.87 per share, and an improvement over the same period of the previous year when B&G Foods earned $66 million, or $1.01 per share.
Sales for the period reached $1.5 billion compared with $1.2 billion the year prior.
“Based on our first nine months of performance and our outlook for the fourth quarter, we expect this strong performance that we are seeing to continue throughout the remainder of the year, and we expect to generate between $1.95 billion and $1.97 billion in net sales for 2020,” Mr. Wacha said. “We expect to generate between $360 million and $370 million in adjusted EBITDA.
“While we don't expect to remain at the same torrid plus 20% area growth rate into perpetuity, we do anticipate growth in the fourth quarter to remain elevated or up as much as 10% or more for net sales, which will drive the rest of our model.”
At the end of October, B&G Foods announced plans to acquire the Crisco brand from the J.M. Smucker Co., Orrville, Ohio, for $550 million. It will be the second largest acquisition in the company’s history.
“Similar to many other brands in our portfolio, Crisco has seen elevated performance throughout the pandemic, boosted by strong double-digit increases in consumption as Americans are reembracing their kitchens and rediscovering the joys of baking,” Mr. Wacha said.
The company expects Crisco to generate $270 million in sales and approximately $65 million to $70 million in adjusted EBITDA in fiscal 2021.