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Changing U.S. Customer Preference Sees $6 Billion Acquisition Deal In Healthy Snacks Makers By Hershey, Campbell


12/19/2017


Changing U.S. Customer Preference Sees $6 Billion Acquisition Deal In Healthy Snacks Makers By Hershey, Campbell
As the appetite for healthy foods grows among Americans, food companies are striving to cater to tat changing preference.
 
This was reflected when deals worth $6 billion was unveiled by Campbell Soup Co and Hershey Co for purchasing of healthy packaged snacks makers.
 
Cape Cod chips-maker Snyder‘s-Lance Inc would be bought over by Campbell for $4.87 billion in cash. The aim is to fight the sagging soup sales. Brands like Eatsmart veggie snacks is owned by Snyder‘s-Lance which is also the No. 5 U.S. healthy savory snacks maker in the U.S.
 
On the other hand, brands like SkinnyPop popcorn and Paqui tortilla chips would be owned by Hershey from the buying out of Amplify Snack Brands for approximately $921 million.
 
Popular among millennials, Snyder‘s-Lance and Amplify Snack claim that most of their products are devoid of any artificial ingredients or transfats and  are made up of dairy-free cheese and naturally sweet flavors.
 
There has been a fall in the demands of the mass-market brands and in the prices of the products of U.S. packaged food makers and companies like General Mills Inc and Kellogg Co are attempting to increase margins by buying or investing in healthy-food companies.
 
While in October, Chicago Bar Co – the maker of RXBar protein bar maker, was bought over by Kellogg for creating a premium positioning for their wares, Angie’s Artisan Treats – the maker of Boomchickapop popcorn was bought over by Conagra Brands Inc in September.
 
According Euromonitor International data, there has been a growth of about 15 per cent in the last five years in the U.S. savory healthy snacks market which is believed to have an annual size of $8.95 billion in terms of sale volumes. And in the same time period, there has been a 20 per cent rise in the $10.37 billion market of the healthy sweet-snacks market in the country.
 
Last week, the acquisition of Pacific Foods, the maker of organic soup and broth maker, by Campbell was completed. The deal was worth $700 million.
 
“We think the Snyder‘s-Lance deal represents crystalline logic,” ConsumerEdge Research analyst Jonathan Feeney said in a note.
 
Feeney said that the $2 billion U.S. snack portfolios to be created by the deal between Melding Campbell and Snyder‘s-Lance would result in radical cost reduction and addition of complementary salty snacks that would seemingly complete Campbell’s successful Pepperidge brand as well as Lance’s positioning as a large national distributor of salty snacks.
 
He added that faster growth would be the main benefit to Hershey from Amplify. B ut he warned that the deal also makes Hershey fit for competition from the likes of PepsiCo Inc’s Frito-Lay and Campbell’s Pepperidge.
 
(Source:www.reuters.com)


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