Flagstone Foods Acquires Emerald Nuts
Minneapolis-based Flagstone Foods has built a niche manufacturing store-brand snacks for giant retailers like Walmart and Walgreens. Its latest acquisition, though, is a step in a slightly different direction.
On Tuesday, the company announced that it has purchased Emerald Nuts from Campbell Soup Co. for an undisclosed sum. The move means that Flagstone will begin manufacturing products under an independent food brand instead of a retailer.
In a Wednesday morning interview, Flagstone CEO Harry Overly acknowledged that the acquisition is “a bit of a departure” for the company. But he maintains it’s “more of a lane change than a true departure.”
As Overly sees it, Flagstone’s experience building store-brand products will benefit Emerald. “We’re category experts in terms of what’s happening with consumer trends, attitudes, and purchase behaviors,” Overly said. His plan is to use those insights to develop new products for Emerald.
He also said there’s little overlap between shoppers buying Emerald products and those buying store brands, aka “private labels.”
“Emerald has a specific shopper,” said Overly, who became CEO of Flagstone in 2022. “That shopper does not overlap that heavily with private label.”
Flagstone bills itself as “one of the largest manufacturers and distributors of private label snack nuts and trail mixes in North America.” Overly estimates that about 70 percent of snack nuts on store shelves are private label. “No major branded player was actively leading the category, so then retailers took it upon themselves,” Overly explained.
But that’s changing, and Minnesota food companies are angling to take the lead. Two years ago, Austin, Minnesota-based Hormel Foods Corp. bought Planters for a whopping $3.3 billion. Since then, Planters has steadily rolled out a stream of new products. Overly hopes he can do the same for Emerald.
“I don’t have to fight to build brand awareness [for Emerald]. It already has awareness in the category; people recognize what it is,” Overly said. “We just may have to reinvigorate it.”
The acquisition is expected to create about 60 to 80 new jobs at Flagstone. About a dozen of those will work at Flagstone’s corporate headquarters in the North Loop. Other jobs will likely be in Flagstone’s manufacturing facility in Texas.
Flagstone, which employs about 800 people in total, also has plants in North Carolina and Alabama.
Flagstone’s current headquarters is in Minneapolis, but it had operated for many years in St. Paul. That changed when Connecticut-based private equity firm Atlas Holdings purchased the company from Treehouse Foods Inc. A decade ago, Overly used to work for Treehouse.
Meanwhile, in a statement, Campbell noted that Emerald generated net sales of $66 million in the company’s 2022 fiscal year. Still, Campbell wanted to sell the brand as part of an “ongoing strategic process to create even greater focus on driving accelerated growth across our snacks division and power brands.”
Campbell first acquired Emerald as part of its $6.1 billion purchase of Snyder’s-Lance Inc. back in 2018. At the time, Campbell execs said the move would create a “unique, diversified snacking portfolio of differentiated brands.”