Campbell Acquires Rao's Pasta Sauce In $3 Billion Deal
While the start to this decade may not have been the roaring 20s that we all thought we'd signed up for, Campbell, owner of a dozen and a half food brands, including Goldfish, Prego, Pepperidge Farm, and its well-known soup label, certainly appears to be thriving. In January, the packaged-food powerhouse announced it was investing $50 million dollars to upgrade its Camden headquarters, and in July, the company announced its intention to invest $160 million into a Utah-based facility to dramatically increase the production of Goldfish, to the tune of 5 million of the tiny fish-shaped crackers per hour.
Now, on the heels of reporting a $668 million gross profit in its third-quarter fiscal release, Campbell has shared that it is in the process of acquiring Sovos Brands — the parent company of noosa, Michael Angelo's, and Rao's Homemade — for approximately $2.7 billion dollars.
While noosa (a premium yogurt) and Michael Angelo's (a line of Italian frozen meals) may have devoted fans, there's likely no comparison to the type of cult following that Rao's commands. Like Michael Angelo's, the brand also produces frozen meals, in addition to dry pasta and soups, but it's the authentic, preservative-free jarred pasta sauce that devotees can't get enough of.
Why is Rao's Homemade pasta sauce so popular?
The popularity of this sauce stems from the once small, family-owned namesake restaurant (Rao's), which opened in 1896, but the sauce didn't hit grocery store shelves until 1992. Then, Sovos Brands, in a bid to build its portfolio with products that were expected to grow in popularity with consumers, acquired the brand in 2017.
In a market saturated with mediocre pasta sauces that often miss the mark, from the inclusion of additives to too much sweetener, Rao's Homemade sauce — in varieties like marinara and tomato basil — rises above the rest. Always prepared with fresh ingredients and plenty of olive oil, the balanced sauce beats out competitors for one simple reason — it tastes like marinara should.
While both parties are enthusiastic about the transaction, some consumers immediately expressed concern. One Redditor responded in a thread about the transaction with skepticism, stating, "Someone take a picture of the nutrition label now and we'll compare it in let's say a year or two from now," while another wrote, "That means they're gonna start adding sugar to it. This is why we can't eat nice things."