Hershey and Campbell splurge big on better-for-you acquisitions
When customers think Hershey, they think chocolate. But that could change as the company undertakes an acquisition of a snack company famous for crunchier fare.
In a stock deal valued at $1.6 billion, including $600 million in debt, Hershey agreed to purchase Amplify Snack Brands, the owner of Tyrrell’s potato chips, Oatmega whey protein bars and, most notably, SkinnyPop popcorn.
According to a Hershey press release, Amplify’s brands “compete in many attractive food categories that are capitalizing on fast-growing trends in snacking with a focus on better-for-you products that deliver clean, simple and transparent ingredients as well as unique flavors and forms.”
Building on its recent acquisitions of Brookside Foods, Krave Jerky and BarkThins chocolate, Michele Buck, Hershey’s president and CEO, said the acquisition “is an important step in our journey to becoming an innovative snacking powerhouse as together it will enable us to bring scale and category management capabilities to a key sub-segment of the warehouse snack aisle.”
Also on Monday, Campbell Soup agreed to acquire Snyder’s-Lance, the owner of Snyder’s of Hanover pretzels, Cape Cod potato chips, Kettle Chips and Pop Secret, for $4.87 billion.
Denise Morrison, Campbell’s president and CEO, said the acquisition will enable the company to deliver “an even greater variety of better-for-you snacks” to consumers. She added, “The combination of Snyder’s-Lance brands with Pepperidge Farm, Arnott’s and Kelsen will create a diversified snacking leader.”
Both deals will be the largest for each company to date. With the heritage of both being in not-so-nutritious categories that are facing growth challenges, the deals deliver a broader foothold for each in the faster-expanding healthy snacks category.
USA Today speculated that Campbell could bring Snyder’s-Lance products closer to the center aisle where it dominates, while Hershey may be able to broaden SkinnyPop’s reach from grocers into big box retailers and, with an emphasis on single-serving packs, to convenience stores. Similar acquisitions by General Mills, Kellogg, Conagra Brands and Nestle in younger, healthy food companies also suggest that changes may be coming to food aisles.
- Hershey Enters Into Agreement To Acquire Amplify Snack Brands, Inc. – Hershey Co.
- Hershey looks to diversify its snack offerings with purchase of SkinnyPop – Fortune
- Hershey to Buy Krave, a Maker of Jerky – The New York Times
- Hershey’s CEO Looks to Acquisitions and Innovation to Transform the Company – Fortune
- Campbell To Acquire Snyder’s-Lance, Inc. To Expand In Faster-Growing Snacking Category – Campbell Soup Co.
- Why Hershey, Campbell Soup both scarfed up snack deals – USA Today
- Hershey, Campbell bet nearly $6 billion on healthy snacks makers – Reuters
- Snyder’s-Lance to trim snacks portfolio to drive sales growth – Bakeryandsnacks.com
- Snyder’s-Lance Healthier Focus – Seeking Alpha
- Nestle Is Among Potential Suitors for Hain Celestial – Bloomberg
DISCUSSION QUESTIONS: What do you see as the primary motivation behind the Hershey/Amplify and Campbell/Snyder’s-Lance mergers? How do you see the consolidation of young, better-for-you brands into “Big Food” brands affecting grocery shelves?