That’s not peanuts.
On Thursday, Kraft Heinz said it had agreed to sell its nuts business, including the iconic Planters brand, to Hormel Foods for $3.35 billion in cash.
At Hormel, Planters will be added to a growing collection of food brands, including the peanut butter brand Skippy, which Hormel acquired in 2013, and Justin’s nut butter, which it acquired in 2016.
The pandemic has been a sales boon for Kraft Heinz, which had some of its factories working three shifts during periods in the past year to meet high demand for products like its Kraft Macaroni & Cheese. On Thursday, Kraft Heinz reported that net sales in the fourth quarter rose 6.2% to $6.9 billion.
For the full year, Kraft Heinz said net sales rose 4.8% to $26.18 billion. The company said it expected to see flat-to-positive growth in net sales in 2021.
Kraft Heinz, the result of a 2015 merger that created one of the largest food companies in the world, was struggling before the pandemic. Its stock had slumped, underperforming other food companies, as sales and profits sank — in part because consumers had begun to favor less-processed, healthier foods in recent years.
But during the pandemic, consumers, who were now cooking and consuming more meals at home, sought comfort foods and gravitated toward many old-school brands within Kraft Heinz and other food companies.
PepsiCo, a rival of Kraft Heinz, also reported a jump in fourth-quarter earnings Thursday. The snack giant’s revenue rose 8.8% from the same period a year earlier, to $22.46 billion, powered by consumers munching on Cheetos and Doritos during the pandemic.
For Kraft Heinz, the food boom has provided a good opportunity to shed businesses. Last September, it sold its natural cheese business to France’s Groupe Lactalis for $3.2 billion.
The nuts business, which contributed roughly $1.1 billion in net sales to Kraft Heinz for the past year, had been neglected inside the company and had lost market share to competitors, including private-label brands.
Adding insult to injury, for a Super Bowl ad last year, the company killed off and held a funeral for its monocled mascot, Mr. Peanut, who was created in 1916 when a schoolboy, Antonio Gentile, submitted a sketch to win a contest for the brand. At a funeral, attended by other brand avatars like the Kool-Aid Man, a baby peanut emerged from the ground, first squeaking like a dolphin, before proclaiming, “Just kidding. I’m back.”