Brazilian-based beef producer Marfrig Group today acquired ConAgra's Pemmican beef jerky for $25 million. As part of the agreement, ConAgra will retain selling and distribution rights for Pemmican for the next five years.
The move makes sense for both parties, said Jeff Mochal, communications director at ConAgra, Omaha, Neb., For 35 years, Pemmican has been a small player among ConAgra's portfolio of brands, which includes Healthy Choice, Hunt's and Chef Boyardee. The acquisition allows ConAgra to concentrate on core brands like Slim Jims and its popcorn business, Mochal said.
"From our perspective, it's not a pure divestiture because we're still involved in the brand. But Pemmican, as one of our smallest brands, actually represents less than one-half of one percent of our overall sales," he added. ConAgra reported sales of $12.03 billion for the 2007 fiscal year, per the company.
On the branding side, ConAgra will still market the product while ad dollars will come from Marfrig. Mochal did not elaborate on a specific strategy. "[Marfrig] may choose to increase marketing spend and we'll have to execute [on] that, but it's too early to tell. It's still day one of the alliance," he said.
In the past, marketing for Pemmican centered mostly on in-store displays, often paired with ConAgra's Slim Jims line. ConAgra spent $15,000 advertising Pemmican last year (excluding online), per Nielsen Monitor-Plus.