Hormel Foods’ $1.05 billion deal for Brakebush Brothers is more than a bet on chicken – the acquisition would bring a roughly $1.2 billion foodservice business into the company as Hormel sheds less-strategic operations and looks to build a bigger presence in value-added protein.
The proposed acquisition is the Austin, Minn.-based food giant’s largest since its purchase of the Planters snacking business from Kraft Heinz for $3.35 billion in 2021.
Hormel’s protein strategy
The proposed acquisition aims to advance Hormel’s protein strategy, the company said, noting in a press release that it will expand the company’s value-added chicken offerings to grow its foodservice business.
“Brakebush is a highly respected leader in value-added chicken and has earned the trust of customers for more than 100 years through innovation, quality and exceptional relationships,” said Jeff Ettinger, interim chief executive officer, in a prepared statement. “The company’s talented team, strong culture and differentiated capabilities make it an excellent fit for Hormel Foods. Our industry-leading foodservice business has been a source of growth, and we are excited to meaningfully expand our presence in value-added chicken.”
Ettinger said in a conference call Wednesday that Hormel has the advantage of being a longtime player in protein. “But chicken has been probably the least of the proteins for us – under 5% historically. With this acquisition, it will now be closer to 13% even with turkey and beef for our portfolios,” he said.
CEO-elect John Ghingo said chicken is an attractive growth category for protein, noting that Hormel’s growing foodservice business will “help operators succeed through innovation, service and value-added solutions.”
The Westfield, Wis.-based chicken company generated $1.2 billion in net sales over the last 12 months, roughly a tenth of Hormel’s reported $12.1 billion in net sales for fiscal 2025. The company runs five production facilities and two research and development labs.
Foodservice growth for Hormel
Approval would expand Hormel’s foodservice business.
In fiscal year 2025, the food manufacturer reported $7.46 billion in net sales for its retail division, nearly two-thirds (61.6%) of its reported net sales. Foodservice was $3.94 billion, approximately 32.6%, and the remaining $709 million, or 5.9%, was in international sales, according to Hormel.
Hormel Foods President and CEO-elect John Ghingo said that the company has “taken a number of deliberate actions to sharpen our focus and direct resources toward the businesses, categories and capabilities that we believe have the greatest long-term growth potential.”
Hormel believes that value-added chicken will continue to benefit from demand trends and menu innovation.
“Brakebush has built an outstanding position with national and regional restaurant operators, while Hormel Foods brings broad capabilities and an expansive channel presence,” Ghingo said. “Together, we believe there are opportunities to broaden customer access, accelerate innovation and bring a wider range of value-added solutions to market.”
While Brakebush largely operates in the food-away-from-home sector, Hormel also sees opportunity in incorporating value-added chicken with the consumer branded portfolio, Ghingo said.
Portfolio restructuring at Hormel
The announcement is the latest news from Hormel this year in its effort to restructure the company to divest its underperforming businesses and focus on revenue opportunities.
Ghingo cited Hormel’s sale of a controlling stake in Justin’s, its exits from whole-bird turkey and Brazil, and the proposed Brakebush acquisition as four portfolio-shaping moves over the past year.
While Hormel does plan to incorporate the value-added chicken business into its brands, the integration of Brakebush into Hormel will have its limits, Ghingo said.
“Our priority will be to remain focused on driving performance behind both Hormel foodservice and Brakebush,” he said. “With that, Brakebush will operate as a subsidiary, reporting for our foodservice segment.”
