Hormel’s Opportunity: Protein Powerhouse
This afternoon, I sat down with an old friend. We first met when he was waiting tables at one of our favorite restaurants here in Boulder. The restaurant is gone, but the friendship stayed.
It’s been amazing to watch him over the last fifteen years. He started with a jar of peanut butter, and a few weeks ago, sold his company to Hormel.
Justin is now a dad of two, and as we sat outside today, talking about the recent acquisition, the many acquisitions happening in this space, including Hormel’s acquisition of Applegate last year, I realized that Hormel has a huge opportunity in front of it.
They bought into the food movement to the tune of $1 billion between the two acquisitions. It will change their DNA unlike anything else, and they have the unique opportunity to own 21st century protein.
What worked in the 20th century for them isn’t going to work in the 21st century. The habits of consumers have changed. So have our diets. Diet is no longer ‘one size fits all’. What is becoming universal is our demand for “free-from”. Food that is free from additives, preservatives, junk, dyes, GMOs.
In the last year, Hormel bet $1 billion on that movement through these two acquisitions. But more than money has to change hands. There has to be a DNA swap—a genetic reengineering—if they are going to stay relevant.
Inside of these big companies, General Mills, Kashi/Kellogg, Compass Food Group are people and teams who already understand this. They are hardwired to lead, to revolutionize these older brands, to upgrade their operating systems and bring them into the 21st century. These insiders are gold—a compass to drive greater change.
Annie’s has been a compass inside of General Mills, pointing the bigger company in the right direction. Applegate has done the same, educating Hormel about the demands and needs of the 21st century consumer and how these needs are no more of a fad than the cancer, food allergies, diabetes and obesity driving them.
Unlike Monsanto which built its business model on genetically engineering seeds designed for a portfolio of chemicals to treat them. It’s a great model for a chemical company, but in the 21st century, what food company wants to align with that?
Justin’s and Applegate can reengineer Hormel and point them to the opportunity: clean protein—a portfolio of products that recognizes that for the 21st century consumer, protein is no longer ‘one size fits all’ but that the demand for ‘free-from’ is.
What if Hormel decided to expand its portfolio and no longer focus solely on the meat it produced in the 20th century, but also turned its attention to alternate protein sources, plant-based proteins?
They’d be able to meet the protein needs of the 21st century consumers, Paleo and plant-based.
Justin’s and Applegate both can be $1 billion dollar brands. Imagine Hormel’s portfolio, its impact, its shift on the current food system if that becomes a reality?
So Hormel has a decision.
It has to decide what it wants its legacy to be for the 21st century. The 20th century chapter is closed. It can’t be rewritten, but the future can.
Justin’s knows this, because Justin knows this. He wants his brand to be something that his kids will always be proud of. A funny thing happens when you name a company after yourself – you can’t sell it out. It’s yours forever, and that’s a special type of motivation.
As these companies are acquired, they are repeatedly accused of selling out. The internet threw up all over Annie’s the day that General Mills announced that acquisition. Justin’s has heard it. Its plant-based consumers revolted when the company was acquired by an old school meat company like Hormel.
What if Hormel knows that?
And what if Hormel is buying into alternative protein, expanding its portfolio to include plant-based protein, to move towards clean protein? What if they are expanding into plant-based, free-from products to meet the needs of 21st century consumers? It wasn’t in their DNA, they had to bring it into the family.
With the acquisitions of both Applegate and Justin’s, Hormel is clearly acknowledging that they need to buy into the free-from movement.
And as I sat there with my friend, Justin, listening to him talk about his kids, his legacy, his employees and his company, I thought about the guy I knew, who put it all on the line to build that company.
He’ll do it again. His consumers are watching, and so are his kids.
It’s an awesome challenge and an incredible opportunity to #rethinkprotein for the 21st century.
