Interest in cooking and baking keeps B&G Foods on solid footing | 2021-08-06
PARSIPPANY, NJ. – Acknowledging that the company was not going to match the net sales which increased significantly during the COVID-19 pandemic, Kenneth C. Keller, president and CEO, said that B&G Foods, Inc. remains a larger company. important than it was. in 2019, driven by continued growth and interest in cooking, baking and dining at home.
“B & G’s core business is up 7% over a two-year stack from 2019,” Keller said in an Aug. 5 conference call with analysts to discuss second quarter results . “Within the portfolio, our spices and seasonings, pastries and dishes brands are up 20% compared to the second quarter of 2019. And in particular in spices and seasonings, which represent around 20% of our total business portfolio and aggregates are the # 2 spices and seasonings in the United States, net sales are up more than 20% from Q2 2019 and remain well positioned emerging from the pandemic as more and more consumers continue to cook at home more often. In addition, the spice and seasoning portfolio is around 15% to 20% foodservice, so we are also benefiting from this as restaurants and catering establishments reopen, and more and more Americans are dining again. “
Along with its spices and seasonings business, B&G Foods is experiencing positive trends within its bakery product portfolio, Keller said.
“Recent studies show that even in the spring of 2021, around 65% of consumers were baking at home at least once a week, increasing the outlook for our growing list of bakery brands which includes B&G Foods mainstays such as Brer Rabbit and Grandma’s Melasses as well as more recent additions such as Clabber Girl and Crisco, ”he said. “We’ll be spending more time talking about Crisco, but so far, after eight months of ownership, we’re very encouraged by the trends in the category and the top performance of this company. “
Mr Keller said another big impact resulting from the pandemic has been inflation and at unprecedented levels. He said B&G Foods is experiencing inflation on key cost drivers across the portfolio, particularly in many tradable products, packaging materials and freight.
“The impact on our core portfolio is around 3% to 4%, but much higher on the Crisco business, where soybean oil costs have doubled compared to last year,” said he declared.
Bruce C. Wacha, executive vice president of finance and chief financial officer, said B&G Foods moved quickly to execute price increases across much of its portfolio to offset inflation and preserve the structure of margins. So far, the company has made list price increases in around 80% of its brands, he said.
B&G Foods net income for the second quarter ended July 3 was $ 24.55 million, or 38 per share on common stock, down 46% from $ 44.91 million, or 70 per share, the previous year. Adjusted net income, which excludes expenses related to acquisitions and disposals and one-time expenses, decreased 42% to $ 27.1 million from $ 46 million.
Net sales also fell, sliding 9.4% to $ 464.38 million from $ 512.54 million the year before.
Mr. Wacha said the company’s Maple Grove Farms brand has benefited from both strong retail demand as well as a recovery in the restaurant business, generating $ 20.2 million in net sales in the region. second quarter, up almost 12% from the same period in 2020 and up 13% from 2019.
Ortega, meanwhile, posted sales of $ 40.9 million in the second quarter of fiscal 2021, down nearly 13% from the second quarter of fiscal 2020, but up 20%. compared to the same period of the 2019 financial year.
“Ortega is a leading brand that still enjoys COVID-like demand, but we are selling products as fast as we can make them, especially taco shells, taco sauce and chili peppers,” said Mr Wacha said. “And unfortunately, due to internal and external supply chain constraints, we are still not able to take full advantage of the demand opportunity. Ortega is a brand that we rely on a lot, and our operations team are working hard to increase capacity and maximize this opportunity. “
Mr Wacha said Green Giant had a tough quarter that combined the toughest COVID comparisons in B&G Foods’ portfolio with the toughest constraints in the supply chain. The company is currently awaiting new vegetable packs for the brand. Overall, Green Giant achieved second quarter revenue of $ 105.7 million, down nearly 36% from the same period in fiscal 2020 and down 6.4 % compared to the second quarter of fiscal 2019.
Mr Keller, who has only been at the helm of B&G Foods for about six weeks, was asked about his thoughts on the strategy going forward for the future. Noting that he has only just digged in and started to formulate ideas, he nonetheless offered some insight into where he might be heading for the business.
“My approach is to say that we need to do what has worked well at B&G, which stabilizes the stable portfolio and drives modest growth out of it,” he said. “And then we make sure that we make accretive acquisitions that are complementary to the things that we do although we can integrate and integrate quite successfully. And the company has done a remarkable job in that regard.
“I would say the only piece I’m probably going to build on top of it is that we’ve come to a point where we’re competing in a lot of categories with a lot of brands. And I don’t think they are all created equal. I think there are categories, brands and segments for which we are better equipped to add value, create value by bringing them here, either through organic growth, or through synergies or others. things.
“So you’ll probably hear me talking about places where we really want to play and where we think we can win and where we think we’ll be more successful at adding meaningful value creation beyond just bringing them back in-house an times. . “
Mr Keller said he would provide more details on his strategy during the company’s next earnings call in November.