Hormel Foods Corp. apparently has a hankering for a peanut butter and bacon sandwich. The Austin, Minn.-based company, known primarily for Spam and other cured, smoked and deli meats, recently said it's buying Skippy, the country's number two peanut butter brand, for about $700 million.

The brand was launched in 1932. Hormel, which also makes canned chili, sausages and pepperoni, currently generates the majority of its sales in the U.S., with only about 4% of its revenue coming from abroad. Now, the company is hoping that Skippy, its biggest-ever acquisition, will help it grow at home and overseas.

In a conference call with analysts, CEO Jeffrey Ettinger noted that peanuts and peanut oil are popular in China. And while peanut butter isn’t a household staple there, he says it’s rapidly growing in popularity

In the U.S., Ettinger says peanut butter is already regarded as a convenient and affordable source of protein and that Hormel will apply its innovation skills and "take Skippy out of the jar" to use it with other products. Currently, there are 11 Skippy varieties in the U.S., including low-fat and natural versions.

Hormel notes that Skippy is a top brand in the faster-growing subcategory of natural peanut butter. It estimates the overall peanut butter category at $2 billion. Jif, owned by The J.M. Smucker Co., Orrville, Ohio, is the largest brand.

Source: www.news,yahoo.com, The Associated Press