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Little Debbie cakes maker bids on Hostess brand

BY Jason Owen

CHATTANOOGA, Tenn. — McKee Foods, makers of Little Debbie snack cakes, is offering $25 to $30 million for Hostess Brands’ Drake’s brand, according to published reports. Hostess filed for Chapter 11 bankruptcy protection in January 2012.

The Tennessee maker of Little Debbie snack cakes is poised to be the lead bidder at an auction for the assets of the bankrupt company, composed mostly of intellectual property and some equipment, according to the reports. Drake’s Wayne, N.J., plant — the only kosher bakery plant in the U.S., a Hostess investment banker has said in court — isn’t included in the deal.

Drake brands is the maker of such treats as Devil Dogs, Ring Dings and Yodels.

Hostess is aiming to file the agreement with the U.S. Bankruptcy Court in White Plains, N.Y., on Monday. The deal requires a judge’s approval to be put into action, and the offer will be subject to higher bids at auction.

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Cracker Barrel plans expansion into groceries with branded food products

BY Rebecca Haughey

NASHVILLE, Tenn. — Cracker Barrel Old Country Store is embarking on its third attempt to branch out from its chain of  Southern comfort food restaurants by expanding a lineup of branded food products to be offered at grocers and outside retail outlets.

"Our research shows that our guests would like to be able to purchase Cracker Barrel products in places other than just our restaurants and retail stores, and we believe that there is opportunity here to meet that desire," the company stated.

Cracker Barrel currently sells food products, including pancake and corn muffin mixes, under its name, but the items are available only at Cracker Barrel store and through its website. Under a new multiyear licensing agreement with John Morrell Food Group, a Smithfield Foods subsidiary, such products as ham, lunch meats and summer sausage will be available under the Cracker Barrel name and sold in grocers, mass merchandisers and other retail outlets — a first for the company.

The company has not announced when products will hit store shelves or how much revenue they expect the strategy to generate, although the company has stated that boosting the bottom line is not the initiative’s primary goal. The expansion is part of a plan adopted by the company in 2012 under pressure from its largest shareholder to improve its financial performance.

"The Cracker Barrel brand can reach more consumers through supermarkets, which most American households must frequent, whereas not all of them will enter a Cracker Barrel store in the coming year," Sardar Biglari, who holds a 19.99% stake in Cracker Barrel, wrote in a 2011 letter to the company.

In a 2011 U.S. consumer study by Mintel, more than 3-out-of-4 respondents said they had bought restaurant-branded items. Families with household incomes of $75,000 or more were among the most frequent buyers.

As reported in The Tennesseean, this is Cracker Barrel’s third attempt at expanding its business, following two failed ventures in the 1990s: a takeout business at several Cracker Barrel Corner Market locations throughout Tennessee, and a retail-only store called The Store in a Nashville-area mall.

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Healthy Ones deli meat brand to donate to WomenHeart throughout February

BY Melissa Valliant

Healthy Ones deli and lunch meat will be sporting red packaging and signage throughout the month of February in recognition of Heart Health Awareness Month.

The brand is donating 5 cents per tub of lunchmeat and 5 cents per pound of deli meat — up to $50,000 total — sold in grocery stores nationwide to WomenHeart: The National Coalition for Women with Heart Disease.

"We strive to support a healthy lifestyle, so we were thrilled that our 2012 campaign helped aid women in taking preventive actions that reduce their risk of heart disease," said Elizabeth Di John, brand manager of Healthy Ones. "It is very rewarding to know that we can continue supporting those efforts in 2013."

Healthy Ones’ ham, turkey breast, chicken breast and roast beef has been certified as "extra lean" by the American Heart Association.

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