Last month Hormel Foods Corp acquired Applegate, makers of natural and organic deli meats, burgers, cheeses, chicken and hot dogs (a.k.a. “the cleaner wiener”), for $775 million. Applegate will continue to operate independently from Hormel, which owns brands like Muscle Milk, Dinty Moore, Skippy and SPAM. But as with any narrative involving a smaller natural company being bought by a larger food corporation, core natural consumers who disapprove of the transaction have been vocal—especially on Facebook.
Here, Applegate CEO Kerry Collins explains the benefits of being owned by a larger company and the brand’s vision for a sustainable meat future.
newhope360: First and foremost, what does the Hormel-Applegate partnership mean for sustainable meat?
Kerry Collins: I think the partnership with Hormel is a signal that more and more people are making the natural and organic choice that Applegate offers. The reason Hormel purchased us is so we can provide that choice.
This is a great opportunity for Hormel because we can scale while still operating as an independent company—Applegate will still be Applegate. Our supply chain will continue to expand. We started out with a relatively small supply chain and farming network. Throughout the years we’ve expanded that network. Strategically, our vision is to continue to offer consumers the opportunity to eat humanely raised and antibiotic-free protein, and to expand our offerings to other categories and meal offerings. The size of Hormel will help us accelerate scale, and stay true to the mission of our company.
NH360: As Applegate scales, what is the largest challenge for natural and organic meat growth?
KC: We spend a lot of our time thinking about how to expand our supply chain network. We have a track record of being able to do this consciously because we make long-term supply commitments to our farmers so they have the opportunity to invest in infrastructure with confidence. The solidity of our market gives them confidence. When farmers make the investment to raise animals humanely, we have a fundamental belief that the market can expand, and they’ll have an opportunity to expand with us.
With Hormel, we’re excited about growing so we can convert conventional meat producers into organic, humanely raised and antibiotic-free meat producers.
NH360: Hormel's suite of products include brands like SPAM—a product that for many consumers, is the antithesis of natural and organic. How will Applegate maintain or reinforce its messaging?
KC: Hormel didn’t purchase Applegate to make us into products they’re already making. We feel we’re offering a choice of natural and organic, humanely raised products. Hormel recognizes the value in that constituency. I believe we can respectfully coexist and continue to offer consumers the organic options we’re known for.
In terms of how folks evaluate Applegate, it’s going to be as much of what we do as what we say. Our products and practices will stay the same and continue to move the bar forward. For example, within the last few weeks, our beef is now 100 percent grass-fed, and we have moved almost all of our ingredients to GMO free. Above all, we believe in transparency and labeling.
NH360: What types of protein labels (antibiotic-free, humanely raised, etc.) are resonating with consumers?
KC: Consumers continue to resonate with organic and antibiotic free. But out of all the labels, I think consumers are most excited about clean, easy-to-understand ingredients. As people become increasingly interested in where their food comes from, they’lll also be interested in how their meat is raised.
The next step is about what the environment for animals are, the partnerships we work with and the standards Applegate follows. Where meat comes from and how it is raised is equally important.
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