General Mills Inc., is selling its Green Giant and Le Sueur vegetable businesses to New Jersey-based food conglomerate B&G Foods Inc., for approximately $765 million in cash, subject to regulatory approval. The sale of the frozen and canned vegetable brands is part of General Mills’ strategic priority to shape its portfolio for growth, focusing its resources on the brands, categories and geographic markets that have the greatest future growth opportunities like cereal and yogurt, as well as its organic and natural foods segment.
The transaction, expected to close by the end of 2015, includes Green Giant and Le Sueur brands in the United States, Canada and select other markets, which generated annual net sales of approximately $585 million in fiscal 2015.General Mills will continue to operate the Green Giant business in Europe and select other export markets under license from B&G Foods.
Frozen foods of all kinds have been challenged in recent years as a result of the convergence of several trends, especially, but not exclusively, a growing demand for fresh products or, at least, fresher products in refrigerated rather than frozen form. Nevertheless, frozen food products still have much to offer. According to a report from Packaged Facts, consumer demand for natural and organic products are driving growth in the frozen food sector after several years of challenges and declining sales. Sales of the collective frozen food categories dinners/entrées, pizzas, side dishes, and appetizers/snacks will reach $23 billion in 2019.