PARSIPPANY, N.J. — Cauliflower is the star in a spate of innovation launching from B&G Foods, Inc. this year. Cauliflower hash browns, cauliflower crust pizza, cauliflower gnocchi and cauliflower breadsticks will debut in the frozen aisle under the Green Giant banner, and the Ortega brand will add cauliflower taco shells and cauliflower tortillas, said Kenneth G. Romanzi, president and chief executive officer of B&G Foods.
But wait — there’s more.
“Building on the tremendous success of Green Giant Riced Veggies in the frozen aisle, which is now an $80 million business annually, we are launching Green Giant Riced Veggies in the shelf-stable rice aisle,” Mr. Romanzi said during a Feb. 25 earnings call. “Shelf-stable rice is a large $3 billion category with little innovation. Our shelf-stable Green Giant Riced Veggies are made from 100% veggies featuring blends of legumes and veggies like cauliflower, peas, lentils and chickpeas. Green Giant Riced Veggies taste and perform like regular rice but are chockful of vegetables with less carbohydrates and more protein.”
The company expects to generate $20 million in new product sales for the Green Giant brand in 2020, Mr. Romanzi said.
“Green Giant has almost singlehandedly revolutionized the frozen vegetable category,” he said. “And we’ve only just begun.”
Fiscal 2019 was the beginning of a “new era” at B&G Foods, he said. During the year, the company realigned its executive leadership team with new heads of sales, marketing and supply chain and implemented a new enterprise resource planning system. Additionally, the company divested Pirate Brands and acquired Clabber Girl. Financial results for the full year and fourth quarter reflected the impact of the transactions.
Net income for the fiscal year ended Dec. 28, 2019, totaled $76,389,000, equal to $1.17 per share on the common stock, down sharply from $172,435,000, or $2.61 per share, the year before. The prior year included a $133,172,000 gain on the sale of Pirate Brands, net of tax, in the fourth quarter. On an adjusted basis, excluding loss on extinguishment of debt, acquisition and divestiture related expenses, inventory reduction plan impact and other nonrecurring items, net income was $106,566,000, down from $122,308,000 the year before.
Net sales for the year declined 2.4% to $1,660,414,000 from $1,700,764,000. Excluding Pirate Brands, full-year net sales increased 2.1%, Mr. Romanzi said.
Fourth-quarter net income plummeted to $10,259,000, or 16c per share, from $111,924,000, or $1.70 per share, in the prior-year period. Adjusted net income was $17,777,000, down from $22,292,000.
Net sales increased 2.6% to $470,172,000 from $458,055,000 in the comparable quarter.
“All in all, we delivered stable expected performance,” Mr. Romanzi said. “I view this as very important because after many years of industry-leading performance, our earnings stumbled in 2017 and 2018 with fourth-quarter earnings surprises even while growing sales. So delivering what was expected in 2019 was critical for our new leadership team.
“Our plan in 2019 was to deliver modest sales growth and cover inflationary input costs with pricing and cost savings initiatives. And that’s exactly what we did. While we needed some help from the addition of Clabber Girl, we grew net sales 2.1% excluding the Pirate Brands divestiture while we also reduced low-margin trade promotion activity and s.k.u.s.”
For the year ahead, he added, the company’s long-term strategic imperatives remain. The company expects to drive organic growth of flat to 2% while improving margins and making accretive acquisitions.
“In 2020, we expect our net sales to grow about 1% as we drive growth on several of our key brands, but our growth will be tempered down a bit as we continue to reduce low-margin trade promotion and s.k.u.s and overlap the loss of some low-margin private label spice business,” Mr. Romanzi said.
Management also expects its recent acquisition of Farmwise, a frozen vegetable processor, to bolster Green Giant growth. The Farmwise portfolio includes Veggie Fries, Veggie Tots and Veggie Rings.
“Farmwise is a small but very prolific, forward-thinking frozen veggie brand that will allow us to quickly commercialize products from their innovation pipeline and introduce them under the Green Giant brand in the traditional food channel and under the Farmwise name in the natural channel where the Green Giant brand isn’t a good fit,” Mr. Romanzi said. “We are very excited about this small acquisition with quick scale-up capability and a good example of what I meant when I said it’s a new era at B&G.”