TIME Hormel Foods

Hormel goes organic with latest big food acquisition

Hormel sliced turkey is seen for sale in Westminster
© Rick Wilking / Reuters—REUTERS Hormel sliced turkey

Deal is latest by big food company for a smaller 'natural' rival.

Hormel Foods is paying $775 million to buy organic processed meats maker Applegate Farms, the latest deal by a food giant for a smaller rival in the grocery aisle.

“A growing number of consumers are choosing natural and organic products,” said Hormel Foods Chief Executive Jeffrey Ettinger.

The deal will add Applegate’s deli meats, frozen burgers and dinner sausages to Hormel’s [fortune-stock symbol=”HRL”] portfolio of brands, which already includes Spam, Skippy peanut butter and the company’s namesake meats. The acquisition, which is expected to lift future profits, won’t add too much to Hormel’s sales. Applegate’s annual sales are expected to reach $340 million in 2015, a sliver of the roughly $9.3 billion Hormel records annually.

But the acquisition of Applegate is important for two key reasons. It is the latest deal by a “Big Food” maker for a smaller player. Smaller food makers have reported sharp sales growth as grocery shoppers at times turn away from legacy, established brands. Recent deals have included Hershey’s [fortune-stock symbol=”HSY”] acquisition of beef jerky maker Krave, Post Holdings’ [fortune-stock symbol=”POST”] deal for MOM brands, and Hormel’s own $450 million deal last year for Muscle Milk maker CytoSports.

Food companies are spending big on newer brands to lure consumers that want food they consider to be healthier. Applegate plays into the feel-good attitude that has been pervasive in the category. For example, Applegate says it produces meats that are “raised humanely without antibiotics and hormones.” The company’s webpage features an interview with CEO Stephen McDonnell talking about how he and other consumers want meats that don’t contain bad ingredients.

And like the Hershey deal for Krave, Hormel’s acquisition of Applegate is another big bet on protein. Industry analysts like NPD Group have flagged rising interest in protein, with studies showing nearly half of primary grocery shoppers have purchased protein-enriched foods and many are willing to pay more for those products.

Applegate will operate as a standalone subsidiary after the transaction is completed. The company has 100 employees, located primarily in Bridgewater, N.J.

TIME Fast Food

Here’s How Much a Single Shake Shack Is Worth

People walk past a Shake Shack restaurant in New York
© Carlo Allegri / Reuters—REUTERS People walk past a Shake Shack restaurant in the Manhattan borough of New York August 15, 2014.

That's a lot of burgers

Each Shake Shack restaurant is reportedly worth $50 million, according to a chart by Zero Hedge citing value per restaurant as included in public filings.

If accurate, Shake Shack outpaces the value-per-restaurant of its competition by far. For example, Business Insider reported that each Chipotle is worth just $10 million, while a McDonald’s[fortune-stock symbol=”MCD”] is worth just $3 million.

Shake Shack currently has 63 locations and expects to open up hundreds more in the future. The company went public at the start of 2015, with the stock price rising over 130% on the first day of trading to $49 per share. As of Friday morning, shares were above $90 each.

TIME Advertising

Somehow This Olive Garden Commercial Is Pretty Touching

It's surprisingly tasteful

Olive Garden just released a 60-second ad that tugs at the heartstrings and celebrates family.

The spot, produced by Grey New York, features families singing together, reuniting after years apart and other touching moments captured in low-definition that suggests authenticity. There aren’t any cheesy food-shot clips, as noted by Adweek, which first reported on the new commercial’s release. Throughout the minute-long ad a sweet tone is set as a young girl and an older family member sing and play the song “Home” by Edward Sharpe and the Magnetic Zeros.

“In our latest commercial, Olive Garden celebrates family–whether traditional, blended and extended, neighbors, co-workers or friends. It’s family that supports us, cheers us on, and grounds us in what truly matters,” according to the restaurant chain on YouTube. “That’s why at Olive Garden, we’re all family here.” The ad marks a departure from Olive Garden’s past ads and fits in more closely with with their tagline: “We’re all family here,” which Adweek said its used since 2013.

Olive Garden is owned by Darden Restaurants, which posted higher sales and solid earnings in its latest financial quarter. In fact, the company said Olive Garden celebrated same-store sales up 2.2% boost and growth for the second consecutive quarter for the first time since 2010, according to CNN Money.

Olive Garden made headlines recently with a new item on its men: a breadstick sandwich.

TIME Candy

These Candy Companies have a Surprising New Strategy

Mars

The candy companies are making a push into healthier snack bars

Candy companies are jumping on the health food bandwagon. Yes, really.

Mars Chocolate North America and Hershey both plan to introduce snack bars for health-conscious consumers, according to Ad Age.

The two companies unveiled their new bars at the Sweets and Snacks Expo this week in Chicago. Mars and Hershey are the biggest players in the US confectionary market with 25% market share each, Ad Age said. The new snack bars will feature fruit, nuts, dark chocolate and, allegedly, lower calories.

With the new bars, the two companies will compete against each another as well as against Kind, a successful snack bar start-up.

Mars will reportedly debut its Goodnessknows bars in stores in August. Hershey’s Brookside bars are just now starting to reach store shelves.

The push into snack bars comes amid a broader shift by the food industry to make their products healthier, or at least appear healthier. Fast-food chains are increasingly selling lower calorie menu items and meat produced without hormones.

For more on how large food companies have been singing a healthier tune recently, check out Beth Kowitt’s Fortune feature “The war on big food.”

TIME Advertising

This Beer Ad Only Works When Women Pass By

It uses state-of-the-art "gender detection" software

 

German beer maker Astra wants women to know their purchasing power is important.

The beer brand has made an automated billboard that speaks only to women when they pass by, Engadget reports. The billboard comes equipped with a camera and “gender detection” software. It also responds to women according to their age from one of 70 different recorded responses. The billboard was developed by the ad agency Philipp und Keuntje and features German comic Uke Bosse.

Read next: What your beer says about you

TIME Food & Drink

Just When You Thought This Starbucks Treat Couldn’t Get Any Better Now It’s Got a Cookie Straw

cookie-straw-starbucks
Starbucks

S'mores Frappuccino, meet your tasty new straw

The Starbucks S’mores Frappuccino debuts on Tuesday, and the blended treat is getting an even sweeter addition: Now you can stick a “cookie straw” in your blended beverage to really round out your sugar high.

The rolled wafer, lined with chocolate, will be available for $0.95, with limited numbers being given away free with the new frap.

The new Frappuccino comes layered with marshmallow infused whipped cream, milk chocolate sauce, coffee, milk and ice, and a graham cracker crumble.

TIME food and drink

Your Cheap Wine Might Be High in Arsenic

Lawsuits claims Franzia and Trader Joe wines contained high levels of the known carcinogen

A class action lawsuit in California claims there are high levels of arsenic in some varieties of low-cost wine.

The lawsuit says wines including Franzia White Grenache, Trader Joe’s Two-Buck Chuck White Zinfandel, and Menage a Trois Moscato had between three and five times the amount of arsenic the Environmental Protection Agency allows in drinking water. Arsenic is a known carcinogen that can lead to other serious health problems.

According to CBS News, which first reported the story on Thursday, a laboratory analyzed over 1,300 bottles of wine and found nearly one in four had arsenic levels higher than the EPA permits in water. The laboratory found cheap wines had the highest levels of arsenic. The lawsuit accuses more than 24 winemakers of having unsafe wine.

Wine is not regulated by the federal government, and the Wine Group, which distributes Franzia wine and is named in the lawsuit, told CBS comparing wine to water is misguided because most people consume more water than wine.

Treasury Wine Estates, another company named in the lawsuit, said its “brands are fully compliant with all relevant federal and state guidelines.” Trader Joe’s said in a statement they are “investigating the matter with several of our wine producing suppliers.”

The lawyer filing the suit said his ultimate goal is to get the wines recalled, get companies to distribute refunds and “ultimately clean up the wine industry in California.”

[CBS News]

Read next: Calorie Count Coming Soon to a Can of Guinness Near You

Listen to the most important stories of the day.

TIME Food

What Pizza Hut’s Radical New Menu Actually Tastes Like

Pizza Hut Menu Launch Press Event in NYC
Rob Kim—Getty Images/Pizza Hut Pizza Hut unveils its new menu in New York on on November 10, 2014.

Depends how you feel about honey sriracha crust and balsamic drizzles

The half-dozen servers were dressed in all black, down to the sleek leather gloves they wore as they doled out slices of Pretzel Piggy, Old Fashioned Meatbrawl and Cherry Pepper Bombshell. On the side: balsamic, buffalo, BBQ and honey sriracha sauces, or in Pizza Hut’s new parlance, “drizzles.” All of it was surrounded by a new logo, new delivery boxes, new casual-looking uniforms, and a new motto: “The Flavor of Now.”

This is the new, at times unrecognizable, Pizza Hut. Or, at least, it was the one shown to members of the media Monday afternoon to mark what David Gibbs, the company’s newly installed CEO, calls “one of the biggest moves we’ve ever made in our history.”

On Nov. 19, Pizza Hut will essentially relaunch its entire brand, changing the food it serves, the way its ordered and even the company logo. There are 11 new signature pizzas, six new sauces, 10 new crust flavors and four drizzles — enough options to allow for 2 billion unique pizza combinations. For the company known for trencherman staples like Stuffed Crust, Meat Lover’s and Supreme, the new menu is the fast-food equivalent of a Hail Mary pass.

“It’s a fear of irrelevance,” says Darren Tristano, a food industry analyst at Technomic. “But the potential to negatively influence their current customer base is certainly there.”

It’s a risk Pizza Hut is willing to take, though they’re hedging bets by keeping those old favorites on the menu. Sales at the nation’s largest pizza chain have been dropping for two years, as Domino’s, Little Caesars and Papa John’s—the No. 2, 3 and 4 chains, respectively—have cut into Pizza Hut’s business. Regional build-your-own pizza chains like Blaze and Pieology and customization-heavy fast-casual brands like Chipotle are also luring diners from the pan pizza depot.

“America’s tastes are changing,” Gibbs says. “People are interested in bold new flavors. It’s a pretty natural move to be the one to take the pizza category where nobody’s taken it before with all these new flavors and ingredients.”

Domino’s offered a template in 2009, when the company admitted that its sauce and crust weren’t that great and invited customers to taste the new version. They bolstered their campaign with an updated social media presence and smoother online ordering to cater to millennials. Sales have soared since, which is as much a reason for Pizza Hut drizzling hot sauce on garlic crusts as anything.

So what does the “flavor of now” taste like? Thankfully, better than it sounds (The Cock-a-Doodle Bacon. Why?).

We started with Pizza Hut’s new asiago breadsticks alongside four dipping sauces: balsamic, BBQ, buffalo and honey sriracha. They’re miles from your basic marinara or cheese sauce, but not necessarily for the better. Whether dipping in the sweet but mild balsamic, tangy, molasses-heavy BBQ, unmemorable buffalo or lightly spicy honey sriracha, my asiago sticks longed for a red sauce.

The newfangled pizzas tended to come together better. The Cock-a-Doodle Bacon pie is spread with a creamy garlic parmesan sauce topped with grilled chicken and bacon. The riff on Alfredo is rich enough that you don’t miss the marinara.

The Old Fashioned Meatbrawl is a reasonably restrained update on the classic topping: the meatballs are small enough not to dominate each bite, and a garlic crust adds an extra salty pop.

Cherry Pepper Bombshell is also better than it sounds. The cherry peppers and balsamic drizzle add a sweet punch that goes well with meaty salami. But the shower of fresh spinach on top didn’t add much. It felt similarly unnecessary on the Pretzel Piggy, which is one of the most convoluted combinations on the new signature menu. A salted pretzel crust with the creamy garlic parmesan sauce from the Cock-a-Doodle is topped with bacon, mushrooms and spinach and then finished with a balsamic drizzle. It worked, kind of, though you’d need to be in a particular kind of mood to take one down solo.

The custom crusts are Pizza Hut’s attempt to make choosing your dough as common as picking your toppings. Of the two new ones I tried, the Ginger Boom Boom crust—with regular cheese and marinara—was subtle, a bit garlicky, with only a mildly taste of ginger. The honey sriracha crust (with a pepperoni topping), meanwhile, was sticky and a bit too overpowering.

So is this really what millennials crave? Maybe. Pizza Hut will likely cast off a kicked-up drizzle, flavor-dusted crust or meatbrawl pie if it turns out it isn’t selling. Besides, it’s not as if Pizza Hut is a sauce and dough purist.

“We’ve always been the one taking the category to new places,” says Gibbs, Pizza Hut’s CEO. “Yes, the younger customers are more interested than the older demographics in experimenting with flavor. But I think across all demographics, there’s something on the menu for everybody.”

Read next: Watch McDonald’s Prove the McRib Is Made of Actual Food

TIME Fast Food

Pizza Hut’s New Menu Has All Kinds of Crazy Stuff

Pizza Hut Sweet Sriracha Dynamite
Pizza Hut Pizza Hut's "Sweet Sriracha Dynamite"

Salted pretzel and curry!

Pizza Hut is taking a ride on the wild side to halt its recent sales decline.

A new menu launching Nov. 19 includes 10 new crusts, new topping and sauce options, and a selection of more low-calorie pies, the Associated Press reports. The new sauces include premium crushed tomato and honey sriracha. The new crust flavors include salted pretzel, toasted cheddar, curry, and fiery red pepper. The curry flavor is one of two that will be offered for a limited time and switched out regularly.

Pizza Hut’s new offerings are an attempt to turnaround consistent declines in sales, CNBC reports. Pizza Hut has experienced a 2%-decline in same-store sales over the past year, while its competitors Papa John’s and Domino’s have grown.

[AP]

TIME Laws

Arkansas Keeps ‘Patchwork Prohibition’ on Alcohol

Alcohol Liquor Store
Ted S. Warren—AP

Half of the state's counties are dry, and they're staying that way for now

Arkansas voted Tuesday against allowing alcohol sales statewide, preserving the status quo of “patchwork prohibition” that exists in half of the state’s counties.

With 96% of precincts reporting, 57% of voters said no to the Arkansas Alcohol Beverage Amendment, which would’ve changed the constitution to allow for the manufacture, sale and distribution of liquor, beer and wine across the state. Arkansas has one of the highest concentrations of dry counties left in the U.S. Thirty-seven are currently dry while 38 are wet.

The issue largely pitted churches, existing liquor stores in wet counties and rural, conservative residents against more liberal, populous counties and out-of-state retailers looking to get a foothold in previously dry regions. The ballot initiative appeared to have significant support as recently as last month. But support for the amendment eroded as its main opponents, led by Citizens for Local Rights, vastly outspent the initiative’s backers.

“We started late and didn’t have the resources to get our message out,” says David Couch, a lawyer and chair of Let Arkansas Decide, which led the campaign to legalize alcohol statewide.

Couch’s organization raised about $200,000 and was supported mainly by out-of-state convenience stores. Citizens for Local Rights raised $1.8 million from roughly 900 contributors, many of which were existing Arkansas liquor megastores, often near the border of a dry county.

Polling had shown growing opposition to the amendment in the weeks leading up to the vote. Citizens for Local Rights’ primary message was simple: Don’t let the liberal-leaning urban counties dictate to the smaller, conservative ones. Add in some help from local pastors and churches warning of legalizing a vice in heavily Christian areas, and it appears that message resonated with voters.

But Couch of Let Arkansas Decide says he’s not giving up. His next move is to try to get state legislators to reduce the threshold required to get the issue, known as the “local option,” on the ballot county by county. Signatures of 38% of registered voters within a county must be collected to trigger a vote.

“If that doesn’t work, we will refile the measure and start earlier,” Couch says. “And hopefully be better funded.”

Your browser is out of date. Please update your browser at http://update.microsoft.com