Salad dressing + pickles; cake mix + prepared meats

US-RETAIL-WALMART-OPENING

A customer walks down the coffee and breakfast cereal aisle in a Walmart Neighborhood Market.

Hillshire Brands of Chicago has announced it will buy Pinnacle Foods of Parsippany, New Jersey, in a deal valued at $4.23 billion.

The announced merger will bring Hillshire’s well-known meat offerings—such as Jimmy Dean sausages and Hillshire Farm luncheon meats—under the same corporate roof with Pinnacle’s leading frozen and packaged food brands—such as Duncan Hines cake mixes, Birds Eye frozen vegetables, Vlasic pickles, Wish-Bone salad dressings and Hungry-Man TV dinners.

Industry analysts say the deal will increase Hillshire’s marketing clout with grocery chains, in an era of intense competition with private-label (store) brands, and smaller niche brands that promote themselves as more healthy, natural, authentic, and/or local than big legacy brands.

“It’s really one big junk food company buying another big junk food company,” says food-industry critic Michael Jacobson, executive director of the Center for Science in the Public Interest. “Although Birds Eye does make some very healthful frozen vegetables.”

Health-conscious consumers these days are shopping more around the outskirts of the grocery store—for the fruits and vegetables, the fresh-prepared salads and other ready-to-eat fare. “The grocery aisles are getting flooded with a wealth of new products—either all-natural, organic, whole-grain,” says Hester Jeon, a food-industry analyst at IBISWorld. “So these household brand names are facing intense competition right now.”

Companies like Hillshire will continue trying to lure people back into the center aisles, says Paul Weitzel at retail consultancy Willard Bishop. Weitzel calls the center aisles the “economic engine” of the store--where the packaged, processed, and more profitable items are shelved.

“Convenience is one trend that everyone continues to chase—re-sealable, portion control,” says Weitzel. He adds that post-merger, Hillshire will have more clout to promote its center-aisle brands: by doing more in-store promotions and end-of-aisle displays, and by trying to muscle in on premium shelf space.

Hillshire Brands of Chicago:

Jimmy Dean sausages

Ball Park franks

Hillshire Farm luncheon meats

Sara Lee baked goods

Aidells sausage

Gallo Salame

Golden Island Premium Jerky

Pinnacle Foods of Parsippany, NJ:

Duncan Hines baked goods mixes

Birds Eye frozen foods

Mrs. Butterworth’s

Van de Kamp’s

Log Cabin syrup

Wish-Bone salad dressings

Lender’s bagels

Celeste frozen pizza

Vlasic pickles

Hungry-Man TV dinners

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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