Hormel makes $1 billion bet on chicken

Hormel Foods is branching into a new — and wildly popular — meat category with a deal to acquire a chicken company for more than $1 billion.

The Austin, Minnesota-based meatpacker is buying Brakebush Brothers, whose portfolio includes pre-prepared breaded tenderloins, chicken breasts and nuggets.

Hormel already sells protein staples such as Applegate bacon, Jennie-O ground turkey and Planters peanuts. This $1.055 billion acquisition positions Hormel to chase consumers’ growing appetite for chicken, including by bringing Brakebush’s food service business into grocery aisles.

“Brakebush is exactly the type of business we have been looking to add to our portfolio,” incoming CEO John Ghingo said on a Wednesday morning investor call. “We’ve taken a number of deliberate actions to sharpen our focus and direct resources to the businesses, categories and capabilities that we believe have the greatest long-term growth potential.”

The acquisition comes at a time when high food prices are forcing consumers to make economic trade-offs at the grocery store. Diets are also evolving as GLP-1 weight loss drugs, advice found on social media and other factors influence consumer choices.

Hormel’s stock has declined more than 50% in the past five years. Last month, the company reported a drop in quarterly sales and trimmed its fiscal 2026 sales guidance.

The company’s stock was up less than 1% at market close on Wednesday.

Jeff Ettinger, Hormel’s outgoing CEO, said on the Wednesday call that chicken has been one of the company’s smaller protein categories. It has historically made up 5% of Hormel’s portfolio, but with the acquisition it will be closer to 13%, he said.

Chicken is a top protein choice for consumers because of its nutritional value and taste, according to Cargill’s 2025 Protein Trends report. It’s also an affordable alternative as beef prices rise.

Nationally, the average retail price for boneless, skinless chicken breast is $4.17 per pound, compared with $6.92 per pound for uncooked ground beef, according to the U.S. Bureau of Labor Statistics.

The shift toward less-expensive proteins has also boosted Hormel’s ground turkey business. The company sold its whole-bird turkey business in February as it sharpened its focus on “value-added” products — industry parlance for foods that are processed or prepared rather than sold in their basic commodity form.

Hormel doesn’t report turkey as a standalone segment, but said in the most recent quarter that ground turkey recorded mid- to high-single-digit sales growth.

“Protein remains one of the most attractive long-term opportunities in food, and chicken continues to grow in relevance with consumers and food operators alike,” Ghingo said.

He added that demand, changing menus and convenience make the acquisition an “attractive opportunity” for Hormel.

Hormel’s last acquisition was five years ago, when it bought Planters for $3.35 billion. It was the largest acquisition in company history, followed in size by Wednesday’s deal to buy Brakebush.

Ettinger said he sees similarities to Hormel’s 2015 acquisition of Applegate Naturals.

“When I think about that one, we looked strategically at the category and said, ‘Hey, look, this organic, natural, antibiotic-free area is important. It’s growing. It’s not a fad. We really ought to be getting into that,’” Ettinger said.

A significant portion of Brakebush’s current business serves convenience stores and food-service operations at colleges and senior living facilities.

Hormel’s food-service business has grown for 12 consecutive quarters, according to the company’s most recent earnings report.

The acquisition includes Brakebush’s headquarters in Westfield, Wisconsin, as well as facilities in Texas, North Carolina and Wells, Minnesota — a small town 40 miles east of Hormel’s home base.

Ettinger said the two companies have been in conversation for more than two decades.

“In a 100-year-old business, it’s obviously a huge decision that (Brakebush) made, to go the route of partnering with another company, and we’re very proud that they picked us to be that partner,” he said.