Executive Briefings

Consumers' Obsession With Snacking Is Reshaping the Food Industry

This week was a big moment for deals in the food industry. Campbell Soup Company announced that it would acquire Snyder’s-Lance for nearly $5bn, and the Hershey Company said it is buying Amplify Snack Brands in a deal valued at about $1.6bn.

At the heart of both of those acquisitions? Snacks. And lots of them. Snyder’s-Lance is home to a who’s who of snack brands, including Snyder’s of Hanover, Lance, Kettle, Cape Cod, Pop Secret, and Late July. Amplify, meanwhile, is the company behind the likes of Skinny Pop, Tyrrells, Oatmega, and Paqui.

Big Food companies like Campbell and Hershey are on the hunt for snacking brands, because — to put it simply — the U.S. is a nation obsessed with snacking. More than 90 percent of Americans snack every day. In fact, U.S. consumers are so committed to their snacking habit that many skip regular meals in lieu of these smaller bites throughout the day.

That’s made snacks one of the few bright spots in a consumer packaged foods industry struggling to respond to shoppers’ shifting tastes. The growth of the $89bn snacking market has outpaced the essentially non-existent growth of the rest of the packaged food industry. Snyder’s-Lance, for example, had a compound annual growth rate of 11.5 percent between 2012 and 2016.

That gain clearly has not been lost on Big Food. The deal is part of Hershey’s “journey to becoming an innovative snacking powerhouse,” said president and CEO Michele Buck in a press release. “We’ve been on a journey to expand in faster growing space,” Campbell president and CEO Denise Morrison told Fortune.

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At the heart of both of those acquisitions? Snacks. And lots of them. Snyder’s-Lance is home to a who’s who of snack brands, including Snyder’s of Hanover, Lance, Kettle, Cape Cod, Pop Secret, and Late July. Amplify, meanwhile, is the company behind the likes of Skinny Pop, Tyrrells, Oatmega, and Paqui.

Big Food companies like Campbell and Hershey are on the hunt for snacking brands, because — to put it simply — the U.S. is a nation obsessed with snacking. More than 90 percent of Americans snack every day. In fact, U.S. consumers are so committed to their snacking habit that many skip regular meals in lieu of these smaller bites throughout the day.

That’s made snacks one of the few bright spots in a consumer packaged foods industry struggling to respond to shoppers’ shifting tastes. The growth of the $89bn snacking market has outpaced the essentially non-existent growth of the rest of the packaged food industry. Snyder’s-Lance, for example, had a compound annual growth rate of 11.5 percent between 2012 and 2016.

That gain clearly has not been lost on Big Food. The deal is part of Hershey’s “journey to becoming an innovative snacking powerhouse,” said president and CEO Michele Buck in a press release. “We’ve been on a journey to expand in faster growing space,” Campbell president and CEO Denise Morrison told Fortune.

Read Full Article