Sara Lee will acquire FHS, the US' fourth largest meat snack producer. The meat snack industry is growing fast, largely due to greater availability and increased visibility afforded by the distribution and merchandising muscle of food giants such as Frito-Lay and ConAgra. While most of Sara Lee's recent focus has been on selling off its non-core brands, meat snacks is an area in which acquisition is clearly the name of the game.

Company Profile:

Sara Lee Corporation

Sara Lee announced on Monday that it had agreed to acquire the assets of FHS Inc, a private holding company that owns Trail's Best Snacks, the fourth largest meat snack producer in the US, for an undisclosed sum. Trail's Best Snacks, which includes the Trail's Best and Happy Trails brands, already produces the Jimmy Dean brand of meat snacks for Sara Lee. With this transaction, Sara Lee also acquires Huisken Meats, a producer of frozen meat products.

"Meat snacks sales have been increasing at a double-digit rate for the last eight years, and the acquisition of Trail's Best Snacks supports Sara Lee's strategy to develop leading positions in growth segments of our core categories," said C. Steven McMillan, chairman, president and CEO of Sara Lee. "With the acquisition of Trail's Best Snacks, Sara Lee gains additional brands in this booming category, and adds a strong growth platform for extending the Jimmy Dean brand."

According to the Snack Food Association, meat snacks have grown 74% over the last five years, while salty snacks overall grew 29%. Clever marketing and the popularity of Atkins-style high-protein diets have transformed meat snacks - jerky, beef sticks, kippered steaks and related products - from a tiny niche snack enjoyed mainly by outdoorsmen and truckers to a growing industry serving multiple demographics.

Sara Lee entered the meat snacks category earlier this year when it introduced the Jimmy Dean meat snacks in select markets. With its most recent acquisition, the company should be in good position, with a portfolio of strong brand names and advanced distribution systems, to grab a piece of the growing meat snack pie.

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