Hormel Foods Corp. wants to expand the Skippy peanut butter brand significantly in the United States, Hormel’s Chief Executive Officer and Chairman Jeff Ettinger said Friday before he spoke to employees at Skippy’s Little Rock plant.

Hormel announced in January that it would pay about $700 million to buy Skippy from Unilever.

Skippy is the No. 2 brand of peanut butter in the United States. It has two plants - one in Little Rock and one in Weifang, China. Skippy had about $370 million in sales last year, with more than $270 million in the U.S. and almost $100 million in China.

Hormel’s plan is to increase the Skippy business, Ettinger said.

“We’ve had good success in the past with longtime iconic brands such as SPAM and Hormel Chili,” Ettinger said. “[Skippy] will be a great addition for us.”

Hormel’s top executives visit about a third of its approximately 40 facilities every three years, Ettinger said. Friday’s visit to Little Rock was because of the recent announcement of the Skippy purchase.

Hormel expects to retain the approximately 150 employees in Little Rock, Ettinger said. There is the capability to expand the size of the Little Rock plant, but no decision has been made.

Hormel transferred Roger Vos from Minnesota, where the firm’s headquarters is located, to be plant manager in Little Rock.

“We’re getting to know the team [in Little Rock],” Ettinger said. “We’ve been very impressed with the [history]of quality and safety at the Little Rock plant.”

Hormel was allowed to visit the Little Rock facility on a limited basis during the bidding process for Skippy.

“We think there will be immediate opportunities to find some new distribution avenues in the domestic U.S. of the core product line,” Ettinger said. “We have a heritage of innovation, and we’re turning our team loose on [Skippy]. We’re in the early stages of figuring out what we can do.”

Unilever hasn’t marketed Skippy significantly for the past few years, Ettinger said. But Hormel will concentrate on ways it can take advantage of the Skippy name with other products, Ettinger said. One example is a dark chocolate and natural peanut butter blend, he said.

Hormel has a good track record of buying brands and integrating them into Hormel’s philosophy, said Brian Yarbrough, an analyst with Edward D. Jones in St. Louis.

“I think Hormel believes there are some growth possibilities within the Skippy brand,” Yarbrough said. “Extensions beyond just peanut butter with the name. Those are things that are further down the road. But Skippy is a nice fit in their portfolio. They also like the Chinese exposure.”

Since the announcement of the Skippy purchase on Jan. 3, Hormel’s stock price has risen about 23 percent. Hormel shares closed at $39.28 Friday, up 30 cents in trading on the New York Stock Exchange.

“The stock has done so well since they announced this deal because [Hormel] has such a good record of integrating these acquisitions.”

Forty-eight percent of Hormel’s stock is owned by The Hormel Foundation, which makes the company essentially takeover proof, Ettinger said.

“That provides us the backstop to be long-term oriented,” Ettinger said.

Soon after Hormel announced it would buy Skippy, Hormel decided to change the main sign at the Little Rock plant.

Even though Skippy peanut butter has been made at the plant for years, the primary sign at the Little Rock plant has read Unilever or Best Foods for the owners of the brand. But Hormel decided simply to put Skippy Foods on the front of the building.

“That identification was so strong, we just felt like we needed to do that,” Vos said. “The employees were very excited about it.”

Business, Pages 27 on 03/16/2013