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J.M. Smucker agrees to sell Sahale for a loss

Illustration of forks, knives, plates, money and abstract shapes.

Illustration: Shoshana Gordon/Axios

J.M. Smucker is selling the better-for-you snack brand Sahale for about $34 million, much less than the reported $150 million it shelled out almost a decade ago.

Why it matters: The deal follows the CPG group's deal for Twinkie maker Hostess for $5.6 billion — demonstrating that while snacking is in, it doesn't have to be better for you.

Details: Sahale, which includes the trademarks and a production facility in Seattle, is being sold to Second Nature Brands.

  • Sahale had sales of about $48 million for the year ended April 30, about what it generated when it was first acquired.
  • J.M. Smucker CEO Mark Smucker said the divestiture sharpens the company's focus, allowing it to spend more time on higher growth businesses such as Uncrustables.

Between the lines: This is the unwinding of another deal made when the better-for-you category was all the rage, echoing Hershey's acquisition and subsequent sale of the jerky brand Krave.

  • CPG giants are being more selective about what they buy. Targets need to have sustainable growth and be profitable, in addition to being on trend.
  • The deal also underscores how CPG companies are seeking to balance portfolios: Unilever, for example, bought the frozen Greek yogurt brand Yasso in June but is selling the personal care unit, Elida Beauty.
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