Food Business News - May 15, 2018 - 18
PARSIPPANY, N.J. - The recent Back to Nature acquisition and innovation in Green
Giant frozen food items were factors as
net sales increased 4.7% for B&G Foods
in the first quarter ended March 31.
Rising freight costs, however, were
a drag, and net income dropped 62%.
Company executives, in a May 3 earnings
call, talked about ways B&G Foods will
deal with freight costs going forward.
Net income of $20.5 million, or 31c
per share on the common stock, was
down from $32.8 million, or 49c per
share, in the previous year's first quarter.
Net sales increased to $431.7 million
from $412.3 million. Net sales of Back to
Nature, acquired on Oct. 2, 2017, contributed $20 million.
Net sales of Green Giant frozen
products increased by 13%, marking the
fourth consecutive quarter of doubledigit growth.
"The key driver for our growth in
frozen vegetables is the special launch
and adoption of our new innovation
products, which now include Green
Giant Veggie Spirals, Green Giant Riced
Veggies, Green Giant Veggie Tots and
Green Giant Mashed Cauliflower," said
Robert C. Cantwell, president and chief
executive officer of Parsippany-based
Other brands with rising sales were
Cream of Wheat, up 11%; Victoria, up
11%; and Ortega, up 4%.
"We had a very strong turnaround
in the first quarter from Ortega," said
Bruce C. Wacha, chief financial officer
and executive vice-president of finance.
Under the Ortega brand, B&G Foods
plans to launch a bowl kit that will allow
consumers to heat a tortilla in the shape
of a bowl in which they may add salad or
any type of Mexican entree, said Kenneth
G. Romanzi, executive vice-president
and chief operating officer.
Net sales of Pirate Brands decreased
18% in the first quarter, largely due to
the timing of promotional activities.
Other brands with net sales decreases
were Maple Grove Farms of Vermont,
down 9%; Mama Mary's, down 10%; and
B&G Foods' Ortega
line experienced sales
growth during the
quarter, according to
Green Giant shelf stable, down 7%.
Like other consumer packaged
goods companies, B&G Foods is coping
with rising freight costs. B&G Foods has
increased prices across the majority of its
"These are not large increases, and
they are not just focused on a couple of
unique categories," Mr. Cantwell said.
"Instead, we have elected to go with a
broader approach. In general, our strategy does not appear to be different than
the majority of our competitors, who are
also wrestling with costs."
He added other cost-saving efforts
include procurement savings on raw
materials, optimizing warehousing and
distribution centers, managing freight
and logistics network in a better way, and
"Our inventory reduction plan is
ahead of schedule for the first quarter of
2018, and we have been able to successfully reduce inventory by $46.5 million
to $455.4 million at the end of the first
quarter compared to $501.8 million at
the end of fiscal 2017," Mr. Wacha said.
"We expect to continue to reduce our
inventory throughout the remainder of
the year and expect to achieve the high
end of our $75 million to $100 million
inventory reduction plan by the end of
the year." FBN
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Food Business News
May 15, 2018
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B&G sales growth comes through
Green Giant, Back to Nature