Hormel Foods is strategically spinning off its Justin’s brand of nut butters and chocolate snacks through a partnership with Forward Consumer Partners.
This transaction, anticipated to finalize by year-end, will see the New York-based private-equity firm acquire a 51% stake in Justin’s. Subsequently, Justin’s will emerge as an independent entity under new leadership.
According to a statement, Hormel Foods will retain a 49% interest in Justin’s, although the financial particulars of the deal remain undisclosed.
John Ghingo, president of Hormel Foods, emphasized that the Justin’s brand possesses “incredible equity” and noted that “there is even more opportunity ahead.”
Founded in 2004 by Justin Gold, Justin’s sold a minority stake to private-equity firm VMG Partners in 2013. Subsequently, Hormel Foods, known for its Skippy peanut butter brand, acquired Justin’s in 2016.
Since that time, Ghingo revealed that Hormel Foods has diversified the product portfolio to include almond and peanut butters, in addition to introducing peanut and almond butter cups.
He added: “This new partnership with Forward will build on that strong foundation, providing even greater focus and resources to help the business grow – while we remain invested in its success.” He further stated, “It also reflects a broader strategy at Hormel Foods of finding creative ways to unlock the potential of all of our brands.”
Justin Gold will return as a strategic adviser to Justin’s and will join its board.
Meanwhile, Peter Burns will return as CEO, a position he previously held in 2016. Burns has also served in executive positions at Hershey, Mauna Loa Macadamia Nut Corp., Izze Beverage, and Hain Celestial.
Matt Leeds, founder and managing partner of Forward, will chair the newly independent company.
Leeds remarked, “The Justin’s brand is a textbook Forward asset – a powerful brand that makes beloved products, with an enduring track record of success and significant untapped potential.”
Alongside the Justin’s initiative, Hormel Foods announced that Paul Kuehneman has been appointed interim CFO, reporting to CEO Jeff Ettinger.
Ettinger succeeded Jim Snee in June following the former CEO’s retirement announcement. However, Ettinger’s role is considered temporary until a permanent successor is found.
Although Hormel Foods has not yet released its fourth-quarter results due by October 26, the company has provided an update.
The company expects a “strong” top line amidst “sustained demand across its retail, foodservice and international businesses,” primarily led by turkey products and the Planters snacks brand.
The projected net sales for the quarter fall at the upper end of guidance, while adjusted earnings per share are forecast to be around $0.08 to $0.09 below previous expectations.
For the full year, projections were lowered in August, suggesting operating income will be between $982 million and $996 million, down from the previous estimate of $1.12 billion to $1.19 billion.
Moreover, despite an anticipated diluted EPS of $1.49 to $1.59, the outlook is also reduced to reflect this range.
