Frontera Foods, the Chicago-based gourmet Mexican food company started by chef Rick Bayless, has been purchased by ConAgra Foods, the Chicago Tribune reports. The purchase, which closed Sept. 26, moves the Frontera, Red Fork and Salpica grocery brands under the ConAgra umbrella, which produces such brands as Orville Redenbacher's, Slim Jim and Banquet. But the purchase excludes the Frontera-branded restaurants such as his Chicago staples Frontera Grill, Topolobampo, Lena Brava and Xoco. Terms of the deal were not disclosed.
Remaining in Chicago, the chef's brand, a 20-year-old chips and salsa company, started out with five salsas and grew to carry more than 50 gourmet Mexican food products. Frontera Foods is the first acquisition for ConAgra since it moved its headquarters from Omaha to Chicago in June, and meshes with ConAgra's ambitions. The company didn't discuss revenue, but reports say it has generated double-digit annual sales growth since its inception. However, it hasn't been able to keep pace with demand recently as it has evolved into a national brand.
"We are looking to ConAgra to help us get really good food into more homes across the United States in a way that we just don't have the capability to do," Bayless notes.
"It is our strategy to reshape the ConAgra portfolio to be more premium and more contemporary," says Sean Connolly, ConAgra's president and CEO. "It's a terrific fit with our existing portfolio."
Albert Valdes, currently COO of Frontera Foods, will lead the business as part of ConAgra Foods. For Frontera, the deal will help expand its product line and distribution, allowing Bayless and the brand's CEO, Manny Valdes, to focus on their growing restaurant empire, Frontera Hospitality Group.
Connolly pledged the manufacturing process and quality will remain the same. The premium brand uses all-natural ingredients and its association with a celebrity chef seems to be a natural fit for the packaged-foods giant. ConAgra has pegged its future on growing its lines of premium, gourmet, organic and natural foods under Connolly, who took the helm in April 2015. "The Frontera brand is a preeminent gourmet Mexican food brand in North America," he says. "We believe it provides a tremendous platform off which we can build."
The acquisition by ConAgra almost certainly will boost distribution of the brand, as well as manufacturing capabilities. It was not immediately clear whether ConAgra will take over production of the companies' sauces and salsas, which have long been manufactured and packed in Houston, or its chips, which are made by El Milagro in Chicago.
ConAgra has paired down since Connolly took the reigns in April 2015, seeking to develop a more contemporary portfolio and a healthier bottom line. In February, the company sold its private label business to TreeHouse Foods for $2.7 billion, and in May agreed to sell its Spicetec Flavors & Seasonings business to Givaudan for about $340 million.
This fall, ConAgra says it will complete the spinoff of its frozen potato business, Lamb Weston, which generates nearly $3 billion in annual sales supplying french fries to fast-food chains.
The transformation of ConAgra includes its relocation to Chicago into a 170,000-sq.-ft. office space in the Merchandise Mart. Manny Valdes said ConAgra's move to Chicago was instrumental in striking the deal with Frontera, the Tribune reports, because it allows them to stay in close proximity as advisers.