Hershey and Campbell Acquire Smaller Snack Players

Chew on this—on Monday, the Campbell Soup and Hershey companies both announced their biggest acquisition deals to date, in transactions totaling almost $6.5 billion.

The coincidental timing is a sign of the times—not just of consolidation in the consumer packaged goods/fast moving consumer goods space, but indicators that competition is tougher than ever, with private label brands and independent brands making inroads on bigger food conglomerates, who are responding by getting bigger and more diverse.

The Campbell Soup Co. announced that it is buying the Snyder’s-Lance snacks company for $4.87 billion, while Hershey plans to buy Amplify Foods, SkinnyPop’s parent company, for $1.6 billion. The deals are indicators that big CPG/FMCG companies are thinking small, through acquisitions, in order to grow their stables of brands and audiences.

As CNBC commented, snacks is one of the few categories that (big) food brands have been able to revive through innovation and marketing, like fewer ingredients and clearer packaging.

Snyder’s-Lance had sales last year of $2.2 billion and a powerhouse stable of brands. Denise Morrison, Campbell’s President and CEO, stated that “The acquisition of Snyder’s-Lance will accelerate Campbell’s strategy and is in line with our Purpose, ‘Real food that matters for life’s moments.’ It will provide our consumers with an even greater variety of
better-for-you snacks.”

The combination of Snyder’s-Lance brands with Campbell’s baked snack brands such as Pepperidge Farm, Arnott’s and Kelsen, she added, “will create a diversified snacking leader, drive sales growth and create value for shareholders. This acquisition will dramatically transform Campbell, shifting our center of gravity and further diversifying our portfolio into the faster-growing snacking category. We look forward to welcoming Snyder’s-Lance’s employees and their trusted family of leading brands to our company.”

“There’s an extra element of excitement in the air here at Campbell, and it’s not just holiday cheer,” wrote Luca Mignini, President, Campbell’s Global Biscuits and Snacks division, in a blog post. “Today, we announced plans to acquire snack food leader Snyder’s-Lance.”

“I’m excited about these developments because it further demonstrates our commitment to bring consumers ‘Real food that matters for life’s moments.’ We’ve listened to consumers; and we’re taking bold steps and quick action to offer a variety of snacking options to families everywhere,” he wrote.

“This acquisition brings together our iconic brands such as Goldfish crackers, Tim Tam biscuits, Milano cookies and Royal Dansk butter cookies with Snyder’s-Lance’s well-known brands including Snyder’s of Hanover, Lance, Kettle Brand, KETTLE chips, Cape Cod, Snack Factory Pretzel Crisps, Emerald and Late July. These are not only some of my personal favorite snacks, but a group of brands that truly lives into “better-for-you” snacking with quality ingredients, delicious taste combinations and strong family ties.”

Mignini pointed to the family-owned business being in line with Campbell’s values. “At Campbell, we’re honored to have a trusted relationship with generations of consumers starting nearly 150 years ago. From our beginning as a family-owned company, we’ve been naturally drawn to food entrepreneurs who share our passion, like the founders of Pepperidge Farm, Kjeldsens, Arnott’s and now Snyder’s-Lance.”

As for the Hershey Company, in buying Amplify Foods it’s acquiring a company known for “Skinny Pop—an iconic brand,” as Michele Buck, The Hershey Company President and CEO, told TheStreet.com. “In fact, it will become our sixth-largest brand. The consumers of the brand are very loyal. We think that gives us a great platform for growth.”

Skinny Pop is the 2nd largest ready-to-eat popcorn brand in U.S., and becomes Hershey’s sixth-largest brand with this deal.

“Amplify’s brands expand our offerings from sweet to salty, meeting more consumer snacking occasions. With brand-building expertise and best-in-class category management, we’re focused on driving new snacking growth at retail,” Buck stated on a press conference call.

“The acquisition of Amplify and its product portfolio 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,” Buck stated in a press release.

“Hershey’s snack mix and meat snacks products, combined with Amplify’s Skinny Pop, Tyrrells, Oatmega, Paqui and other international brands, will allow us to capture more consumer snacking occasions by creating a broader portfolio of brands.”

“Since Amplify’s inception in 2014, our company’s goal has been to bring transparency to our products, and clean ingredients and great tasting snacks to consumers,” said Tom Ennis, Amplify Snack Brands, Inc. President and CEO.

“This transaction is a continuation of our mission as Hershey also believes in bringing to consumers great-tasting snacks made with the best ingredients possible. Hershey is a great cultural partner for Amplify and I’m excited for our team who will have access to Hershey’s marketing and go-to-market resources to take our brands to the next level.”

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