PHOENIX — The Pictsweet Co., a grower and processor of frozen vegetables, has acquired the Fresh Frozen Foods business of Inventure Foods, Inc. for $23.7 million. Inventure acquired the frozen fruit and vegetable business in 2013 for a purchase price of $38.9 million.
The sale of Fresh Frozen follows a strategic and financial review that began last year as part of the specialty food maker’s commitment to increasing shareholder value. Inventure Foods, whose brands include Boulder Canyon, Jamba and Rader Farms, faced continued operational challenges in the recent year that negatively affected financial performance. The company recorded a loss in the year ended Dec. 31, 2016, of $30,249,000, which compared with a loss of $20,783,000 in the prior fiscal year. Net revenues were $269,012,000, down from $282,558,000 the year before.
For the fourth quarter, Inventure Foods had a loss of $26,389,000, which compared with a loss of $2,460,000 in the year-ago period. Net revenues for the quarter equaled $63,365,000, down from $68,664,000.
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| Terry McDaniel, c.e.o. and president of Inventure Foods |
“For 2017, we believe we are better positioned to begin to turn around our financial performance,” said Terry McDaniel, chief executive officer and president of Inventure Foods, during a March 30 earnings call. “Our organization is now better able to focus on the improvement of our consolidated business without the distraction of Fresh Frozen, and the sale will help improve our overall consolidated gross margin performance throughout the year.
“Our frozen fruit margins will increase as a result of better operational efficiencies, improved mix and less externally purchased fruit. Within the snack segment, we have made strategic infrastructure and brand support investments, which should help us improve net revenues in 2017.”
Boulder Canyon was a bright spot in 2016, growing 3.1% for the year and 7.9% for the quarter behind increased distribution in grocery, natural and small-format retailers. The company is expanding the snack brand’s footprint into the frozen category with the introduction of riced vegetable products and a new line of quinoa blends.
New Boulder Canyon snacks include kettle potato chips cooked with rice bran oil in such flavors as teriyaki ginger, roasted jalapeño and Himalayan pink salt.
“Rice bran oil is highly regarded for its exceptional balance of heart-friendly polyunsaturated fats and monounsaturated fats, and the oil’s high-smoke point allows for high-temperature cooking, resulting in exceptional crispy and a delicious chip,” Mr. McDaniel said. “This is Boulder Canyon’s first product made with rice bran oil and the first entry of rice bran oil in the kettle chip category and complements our existing line of potato chips made with better-for-you oil such as olive oil, coconut oil, avocado oil and sun/saf oil.”
Also new from Boulder Canyon is a line of baked extruded snacks made with ancient grains, lentils and beans.
“We remain excited about the opportunities for the Boulder Canyon brand in both the snack and frozen product category as we continue to innovate and enhance our healthy, natural product portfolio,” Mr. McDaniel said.
He said he expects the Boulder Canyon brand to deliver double-digit growth in the year ahead. Last fall, the company expanded its kettle-cooked potato chip manufacturing capabilities with the addition of four 300-lb kettles and potato processing equipment at its manufacturing plant in Bluffton, Ind., to meet growing demand for Boulder Canyon potato chips by providing a 50% increase to the company’s current kettle-cooked capacity, or an additional 100,000 lbs of finished product per week.
“Boulder Canyon reached 48% A.C.V., up 10 points versus a year ago, and according to the most recent 12-week I.R.I. data, which measures the grocery channel, Boulder Canyon potato chips were up 24% compared to the potato chip category, which was up 1.6%,” Mr. McDaniel said. “According to the most recent 12-week SPINS data, which measures the natural channel, Boulder Canyon reached 88% A.C.V., up 4 points versus a year ago, and Boulder Canyon potato chips were up 14% compared to the potato chip category, up 10.3%.”
He added, “We have great confidence in Boulder's future growth opportunities and ability to achieve and accelerate growth rate in 2017.”
