Gokongwei sells Hunt’s license to Century Pacific
THE GOKONGWEI group has struck a deal to sell the Philippine license of North American pork and beans brand Hunt’s to Century Pacific Food, Inc. (CNPF) that rebalanced both consumer companies’ brand portfolios.
Hunt-Universal Robina Corp. (HURC), a 50-50 joint venture between the local snack food giant and Illinois-based packaged food company ConAgra, also sold the rights to manufacture, sell, and distribute Hunt’s products in the Philippines to the CNPF, the listed firms said in separate statements, without disclosing the terms of the transaction.
Shares in URC climbed P1.70 or 0.99% to end at P173.70 apiece, while shares in CNPF jumped 16 centavos or 0.97% to settle at P16.66 each at the close of trading on Tuesday.
ConAgra, one of North America’s leading packaged food companies, will retain ownership of the Hunt’s trademark globally.
The transaction also covers the transfer of manufacturing assets and inventory related to HURC’s Hunt’s product portfolio that includes pork and beans, tomato-based spaghetti sauce, tomato sauce and marinade sauce.
URC dropped the Hunt’s brand to concentrate on building its snack food and beverage business, its President and CEO Lance Y. Gokongwei said.
“We have recently conducted a strategic review of our portfolio and have shifted our focus on our core categories namely snack foods and beverages which are geared towards convenience and onthe-go occasions. Given this shift, URC and our joint venture partner, ConAgra have decided to spin off the Hunt’s brand to Century Pacific Food,” Mr. Gokongwei was quoted in the statement as saying.
In the last three years, URC has been on an aggressive overseas expansion binge that saw the Philippine company take over Australia’s no. 2 salty snacks maker Snackbrands and New Zealand’s leading snack food firm Griffin’s.
Hunt’s will be the latest addition to CNPF’s roster of household brands which include Century Tuna, Argentina Corned Beef, 555 Angel and Birch Tree, helping the company further diversify its branded portfolio beyond its core marine, meat and milk products.
“Hunt’s is a welcome addition with its local dominance in pork and beans, its emerging presence in condiments, and its potential to be another source of growth for us,” CNPF President and CEO Christoper T. Po said.
Last year, CNPF purchased the Kamayan shrimp paste trademark for North America, its maiden venture into branded categories outside its core segments.
The Hunt’s deal is an accretive acquisition for CNPF, Mr. Po said, noting the company can leverage potential synergies in the supply chain, distribution, manufacturing and marketing.
The medium-term gains from the transaction would depend on how consistent is URC’s divestment with its product and market premiumization strategy and CNPF’s acquisition on its penchant on building brands from scratch, First Metro Investment Corp. (FMIC) Assistant Vice-President and Head of Research Cristina S. Ulang said in a mobile phone message.
“It bodes well for both. It makes sense for URC because they are spreading themselves too thinly in the branded consumer food segment,” Luis A. Limlingan, business development head at Regina Capital Development Corp., said in telephone interview.
“For Century, they are trying to expand the depth and breadth of the portfolio by going into related food segments. It’s complementary. Hunt’s is a well-known brand,” Mr. Limlingan said.