Why Conagra Is Buying Duke’s Meat Snacks


John Kell, Fortune

Mar 17, 2017


Conagra is buying the upstart food manufacturer behind the Duke's meat snacks brand, the latest deal by a Big Food player to invest in protein at a time when consumers are seeking more of it in their diets.


The Slim Jim and Chef Boyardee maker on Thursday evening announced it entered into an agreement to buy protein-based snacking company Thanasi Foods, which sells Duke's and BIGS seeds. Financial terms of the deal, which is expected to close this summer, weren't disclosed.


"This is another exciting step in our ongoing efforts to reshape our portfolio to be more premium and modern," said Conagra President and CEO Sean Connolly. "These on-trend brands extend our meat snacks and seeds businesses into faster-growing, more premium segments."


Conagra (cag, -0.14%), which already makes Slim Jim meat sticks and David-branded seeds, says Duke's is a fast-growing premium-priced meat snack brand with products including Duke's Smoked Short Sausages and Duke's Steak & Brisket Strips. BIGS sells large in-shell sunflower seeds and sunflower seed kernels. Conagra will almost certainly look to expand distribution, add marketing heft behind these brands and even mull extensions into other categories, all actions often taken by large food manufacturers when they buy a smaller peer.


Deal-making has been particularly popular in the world of protein, resulting in increased sales for meat snacks, Greek yogurt and alternative-based proteins that come from plants. Other deals in the space have included chocolate maker Hershey's (hsy, -0.42%) acquisition of Krave beef jerky and the investments made by both Tyson Foods (tsn, -0.26%) and General Mills (gis, -0.25%) in plant-based food startup Beyond Meat. The venture capital arm of General Mills, called 301 Inc., has made a slew of investments in alternative proteins, including in protein snacking brand D's Naturals and nut milk cheese and yogurt brand Kite Hill.


Conagra's acquisition of Duke's also signifies the company's recent focus on building a higher-margin portfolio...