Dive Temporary:
- J&J Snack Meals has reached an settlement to shop for Dippin’ Dots, a manufacturer of flash-frozen beaded ice cream treats, for $222 million.
- The snack maker stated the acquisition will permit it so as to add a robust client emblem with a successful, rising trade that it will possibly scale additional. The deal is predicted to near via the top of June.
- “Dippin’ Dots aligns completely with J&J’s portfolio technique via including an iconic, differentiated emblem that uniquely enhances our frozen novelty and frozen beverage companies,” stated Dan Fachner, president and CEO of J&J Snack Meals. “This transaction additional positions us for sped up expansion throughout our trade.”
Dive Perception:
The present iteration of J&J strains its origins to 1971 when a failing pretzel corporate used to be bought at a chapter public sale for $72,100, in step with the corporate. On the time, the corporate had 8 staff and gross sales of $400,000.
Part a century later, the corporate has grown to greater than 4,200 folks, a marketplace cap topping $2 billion and a portfolio of manufacturers well past pretzels.
Whilst J&J itself might not be a family identify, a number of of its food and drinks choices offered in comfort retail outlets, supermarkets, film theaters, stadiums and amusement parks are well-liked by shoppers. Its manufacturers, lots of which were got, come with Superpretzel, Icee, Luigi’s Actual Italian Ice, Minute Maid frozen ices, Bitter Patch Children flavored ice pops and The Funnel Cake Manufacturing facility. The corporate stated it has made greater than 30 “value-building transactions” right through its historical past.
“Dippin’ Dots items a chance to obtain an organization that aligns with our center of attention on accelerating expansion whilst turning in incremental shareholder cost,” stated Ken Plunk, J&J Snack Meals’ CFO. “We’re leveraging our sturdy steadiness sheet and wholesome liquidity place to obtain a successful and scalable trade that enhances our long-term expansion technique.”
As the corporate famous, J&J is not any stranger to effectively integrating a brand new emblem into the fold. It is usually a professional about frozen meals and novelty manufacturers, insights that are supposed to permit it to seamlessly combine and additional develop Dippin’ Dots.
On this case, the snack meals corporate is purchasing a product ubiquitous with flash-freezing to create beaded ice cream, yogurt, sherbet and flavored ice merchandise fed on via tens of millions of folks. Fachner defined the alternatives J&J sees in purchasing Dippin’ Dots when he stated the corporate goals to make use of its advertising and innovation experience to advertise the logo and increase its distribution into new markets.
Whilst Dippin’ Dots is widely known in ice cream, it has made inroads in recent times to go into different meals classes.
It signed a licensing settlement previous this yr to carry it into popcorn and in 2018 debuted a cereal in partnership with Basic Turbines. J&J is not any stranger to licensing via its partnerships with corporations akin to Minute Maid with Coca-Cola and Bitter Patch Children with Mondelēz. It definitely will faucet into that perception to leverage Dippin’ Dots. As well as, Dippin‘ Dots will have to proceed to thrive as folks project out extra incessantly following the peak of the pandemic.
After suffering for years following the Nice Recession when shoppers have been extra reluctant to spend cash for certainly one of its cups or packets full of tiny ice cream pebbles, Dippin’ Dots after all filed for Bankruptcy 11 chapter coverage in 2011. It used to be bought out of chapter a yr later via present CEO Scott Fischer.
In recent times, it expanded past ice cream to carry its era to plant-based meat producers, pharmaceutical corporations, probiotic manufacturers and animal feed, amongst different industries, that require high-volume cryogenic freezing.
Dippin’ Dots appears to be on a significantly better monetary footing. The confection, for years touted because the ice cream of the longer term, generated $300 million in gross retail gross sales in 2019. J&J stated Dippin’ Dots is also successful and shall be accretive to its profits in step with percentage. As well as, the purchase supplies “vital tax advantages contributing to an much more horny general valuation,” Plunk stated.
