The Canadian Press - ONLINE EDITION

Spam maker Hormel bulks up by buying Muscle Milk maker CytoSport for $450M

  • Print

NEW YORK, N.Y. - The maker of Spam is bulking up on its protein with Muscle Milk.

Hormel Foods is paying $450 million to acquire CytoSport, which owns Muscle Milk sports nutrition drinks, bars and powders. The move builds on Hormel's push to expand beyond its stable of packaged meats, which include Dinty Moore stews and its namesake chili, with different kinds of protein. Last year, the company also added Skippy peanut butter to its lineup.

Hormel CEO Jeff Ettinger said people are increasingly looking for portable, easy-to-eat products packed with protein. It's why the company recently introduced Rev snack wraps that contain meat and cheese, and Skippy Singles, which are portion-controlled packs of the peanut butter.

As for Muscle Milk, Ettinger said in a phone interview that the brand's customers tend to be younger and have expanded beyond serious athletes over the years. He noted that the drink is advertised on college campuses, for instance, and that students often drink it as a replacement for breakfast or a mid-afternoon snack.

"There are so many meals and quasi-meals that are consumed on the go now," he said.

Americans have been looking to boost their protein intake in recent years, and packaged food makers have been responding by adding it to a wide array of products. General Mills Inc. even recently rolled out a version of Cheerios with extra protein and offers versions of its Nature Valley granola bars with protein.

The demand for protein is showing up in the drinks as well. PepsiCo's Gatorade has a "post-game recovery" drink with 16 grams of protein. And last year, Coca-Cola Co. bought a stake in the maker of Core Power, which is marketed as a post-workout recovery drink.

Muscle Milk, which does not contain any milk, is shelf-stable but is usually sold chilled in convenience stores, where it generates 30 per cent of its total sales.

Hormel's canned meats, meanwhile, haven't exactly been a booming growth area despite their protein content. In the latest quarter, the company said sales of its grocery products were flat, with Spam suffering a decline. Its refrigerated foods such as Black Label bacon fared better, reflecting the trend toward foods people feel are fresher.

The company, based in Austin, Minnesota, said private-equity firm TSG Consumer Partners will sell its stake in CytoSport, which is based in Benicia, California.

CytoSport founders Greg and Mike Pickett, who are father and son, will still be involved in day-to-day operations. For 2014, Hormel said it expects sales of CytoSport to be about $370 million. The deal will add about 5 cents per share to its fiscal 2015 earnings, the company said.

Shares of Hormel Foods Corp. slipped 14 cents to $49.21.

The deal is expected to close within 30 days.

___

Follow Candice Choi at www.twitter.com/candicechoi

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Tree remover has special connection to Grandma Elm

View more like this

Photo Store Gallery

  • Marc Gallant/Winnipeg Free Press. Local/Standup- BABY BISON. Fort Whyte Centre's newest mother gently nudges her 50 pound, female bull calf awake. Calf born yesterday. 25 now in herd. Four more calfs are expected over the next four weeks. It is the bison's second calf. June 7, 2002.
  • Susan and Gary Harrisonwalk their dog Emma on a peaceful foggy morning in Assiniboine Park – Standup photo– November 27, 2011   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

Should political leaders be highly visible on the frontlines of flood fights and other natural disasters?

View Results

View Related Story

Ads by Google