An Inside Look at How Hormel Acquired Applegate

June 8, 2016, 5:50 PM UTC

One of America’s oldest processed meat manufacturers is embracing the future of big food by adding organic offerings.

For 125 years, Hormel Foods (HRL) has operated out of a small town in the middle of Minnesota’s cornfields. Until recently, the company’s approach to food production has remained unchanged, and today Hormel still is best known for Spam.

But as more consumers in recent years have honed in on nutrition and healthy eating habits, Hormel has begun a streak of acquiring younger, health-conscious food companies. Those deals have helped it grow revenue by $3.9 billion over the past 10 years, and this year the company appears at No. 304 on the Fortune 500.

As Ken Otterbourg reports in the latest issue of Fortune, Hormel is holding onto its roots while also setting its eyes on the future by snapping up trendier food manufacturers—especially ones that have an starkly opposite approach to food. Early last year, Hormel CEO Jeff Ettinger began eyeing Applegate Farms, the much smaller organic processed meats company whose motto is “Change the Meat We Eat” and puts activism at the core of its brand. Ettinger knew he had would have a challenge in convincing Applegate’s founder Stephen McDonnell to agree to an acquisition, so he invited him to dinner.

To read more about how Ettinger sealed the deal and bought Applegate for $774 million, read Hormel Finds a New Recipe for Success.

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