Faribault Foods, best known in Minnesota for its Kuner's canned beans and Butter Kernel vegetables, has been purchased for an undisclosed price by privately owned La Costeña, one of Mexico's largest canned food companies.
Faribault, which has been owned by descendants of the same family since 1917, will be combined with La Costeña's Tucson, Ariz.-based affiliate, Arizona Canning. The merged companies will operate as Faribault Foods and will be based in Minneapolis.
Faribault Foods' management team, employees and facilities will be retained as part of the combined company. Faribault Foods will now have approximately 700 employees, including about 550 combined at plants in Cokato, Faribault and Elk River. Another 150 will work at the plant in Tucson.
"I think [the deal] will be great for all of our employees," said Reid MacDonald, Faribault's outgoing 65-year-old CEO, who will now be an adviser to the company. "It has a lot of good potential for growth and it was very good for our shareholders, too."
Albert Hoflack, head of La Costeña's Arizona Canning, will be Faribault Foods' new CEO. La Costeña is a well-known brand in Mexico. Last year, it had a 17 percent share of the Mexican canned and preserved food market, tied with Grupo Herdez, according to market researcher Euromonitor International.
La Costeña bought a former Slim-Fast factory in Tucson in 2006, and began cranking out canned beans. With Faribault Foods under its wing, it will have a much bigger presence in the bean business. "They intend to make Faribault Foods the spearhead of their move into the United States," MacDonald said.
Faribault's three main bean brands, S&W, Kuner and Mrs. Grimes, are combined the biggest sellers in the category west of the Mississippi River, excluding baked beans, MacDonald said. Faribault's success, and the La Costeña deal itself, are testimony to the growing power of the Hispanic market.
Faribault Foods' focus has been on the bean business for the past several years, but it's well known in the Upper Midwest for its Butter Kernel vegetable brand. The company also makes private-label fruit juices and Chilli Man brand chili.
Faribault Foods was established in 1895, and it has been under ownership of the Vandever and MacDonald families since 1917.
MacDonald, who's been CEO since 1980, said the company has had a business relationship with La Costeña for about a decade. Earlier this year, La Costeña came to Faribault Foods with a buyout offer. "We didn't shop the firm around," MacDonald said.