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Diving overview:
- Campbell’s Company is purchasing. La Regina 49% stakeRao’s pasta sauce manufacturer and has the option to purchase the rest of the Italian food manufacturers.
- Campbell said the deal would look better, to be paid in two tranches. Position yourself as a CPG giant Continuously grow your brand by ensuring quality and accelerating innovation and product development. The company expects the transaction to be completed in the second half of fiscal 2026.
- Campbell’s acquired Rao’s as part of its company in 2024. Acquires Sovos Brands for $2.7 billion.
Dive Insights:
Rao’s is a key part of Campbell’s efforts to accelerate growth and increase exposure to premium products. By acquiring a larger stake in the Rao manufacturer, the food giant will be able to maintain the same quality of its popular sauce brand while also laying the groundwork for further growth.
As food manufacturers seek to gain capacity and flexibility for their fast-growing brands, some have turned to M&A.
The same was true when Hershey purchased Dot’s four years ago. Acquisition of 3 manufacturing plants Used to make pretzels. Chip manufacturer Utz Brands Acquired the largest manufacturer. Tortilla chips from the On The Border brand.
This is a similar strategy to Rao’s, where Campbell’s has its roots in the legendary New York restaurant of the 1890s. The deal with La Regina allows Campbell’s to purchase the remaining 51% stake or require the sauce maker to complete the deal for the soup giant.
“Our expanded partnership with La Regina strengthens Rao’s ability to deliver growth opportunities,” Campbell CEO Mick Beekhuizen said in a statement.
Rao’s expanded into pasta, frozen entrees, pizza and soup. But Beekhuizen told Food Dive last year: It’s important for Campbell to “focus” on the source.This accounts for the overwhelming majority of Rao’s sales.
Beekhuizen told analysts on Tuesday. The company said: “We continue to be encouraged by the growth potential of this great brand, driven by continued household penetration growth and high repeat purchase rates.”
During the first quarter, Rao recorded revenue and volume share growth and remained the top brand in the sauces category, the CEO said. Lao recorded it. Outperformed competitors in the sauce category with low single-digit dollar spending growth.
Rao’s was a bright spot for Campbell’s in the most recent quarter.
Campbell’s net sales for the quarter‘s revenue for the year ended November 2 was down 3% from a year ago to $2.7 billion, with some of the decline due to divestitures such as Noosa Yogurt.
Campbell’s and its food peers have struggled with declining sales and margins in recent months as they grapple with higher input costs for ingredients such as cans due to tariffs and lower consumer spending.
