January 31, 2022
Americans have had a love affair with peanut butter since it was first mass-produced in the 1920s. Credited as an invention by Marcellus Gilmore Edson, a Canadian who patented “peanut paste” in 1884, the Texas Peanut Producers Board estimates Americans eat approximately three pounds of it per person each year. That amounts to roughly 700 million pounds annually – enough to coat the floor of the Grand Canyon.
While high in calories, sodium and fat, consuming peanut butter in moderation provides a host of health benefits and nutrients that include protein, magnesium, phosphorous, zinc, niacin, and vitamin B-6. So while you enjoy this wonderful spread on bread with jelly, chocolate or simply by the spoonful, let’s take a look at some of the public companies looking to find a spot in your pantry.
Though it’s the third-largest cereal company in the United States, Post Holdings, Inc. (Tii:POST) took a big step into the peanut butter business last year when it acquired Peter Pan peanut butter from Conagra Brands, Inc. (Tii:CAG). Prior to the acquisition, Peter Pan peanut butter products were co-manufactured by 8th Avenue Food & Provisions, Inc., an affiliate of Post. With a history that dates back 100 years, Peter Pan was the first branded peanut butter in the United States. With products that include regular, crunchy, honey roasted, whipped, and others, Peter Pan peanut butter is one of the leading brands that boast a diversified customer base.
Although not nearly as old as Peter Pan, Jif Peanut Butter is the market leader in the United States. Founded in 1958, the J.M. Smucker Co. (Tii:SJM) brand makes for the perfect PB&J (or peanut butter and jelly for the laypeople) when combined with the company’s plethora of fruit-based jelly and jam spreads. Not only does the Orrville, Ohio-based food provider own the top-selling Jif peanut butter brand, it also produces a line of peanut butters under the Smucker’s brand. And let’s not forget its Goober Grape PB & J Stripes and Goober Strawberry PB & J Stripes – a favorite among kids that combines peanut butter and jelly in one jar.
The second-largest peanut butter provider, Skippy, has been in the Hormel Foods Corp. (Tii:HRL) portfolio since 2013. The consumer-branded foods company, perhaps best known for its Spam and Hormel Chili brands, acquired the peanut provider for approximately $700 million. However, the Austin, Minnesota-based food processing company wasn’t done there. Just eight years later, in June 2021, Hormel acquired the Planters brand (along with the iconic Mr. Peanut mascot) from The Kraft Heinz Co. (Tii:KHC) for $3.35 billion. The acquisitions are paying off. The two brands contributed to Hormel’s strong fourth quarter (which ended October 31, 2021), in which the company posted 19% higher net sales. Management attributed the results to strong performances in brands that include Skippy and the addition of the Planters snack nuts business.
Finally, you may not think of The Hershey Company (Tii:HSY) as a leading peanut butter provider, but the chocolate giant produces Reese’s Peanut Butter Cups, the No. 1 selling candy brand in the United States. In the early 1920s, H.B. Reese, a Hershey employee, started making candy in his basement. The Hershey Company supplied Reese with the chocolate coating for his candy and maintained a close relationship with him throughout his candy ventures. Reese’s six sons took over the business and eventually sold it to The Hershey Company in 1963.
Market research provider IBISWorld forecasts the peanut butter production industry will generate $2 billion in revenue this year. Illustrating this love for America’s favorite legume-based spread, McDonald’s Corp. (Tii:MCD) is testing out a new peanut butter-flavored McFlurry. So however you prefer to consume peanut butter, there’s guaranteed to be a major player lined up to fill that demand.