Snyder's-Lance Is Getting Healthy With Acquisition And Recent Sell-Off

By Karla Paris

Healthy Snacking Category shapes Snyder’s-Lance strategy to earn larger market share

There is no denying that healthy eating is a major food trend with a big impact on consumer choices. Sales of natural and organic foods and beverages in the U.S. are projected to exceed $78 billion by 2015, based on research by Packaged Facts.

Snyder’s-Lance announced on May 7 that it is selling off its private brands and two manufacturing plants, while at the same time acquiring one of its suppliers to better position the company in growth markets such as healthy snacks.

Snyder’s-Lance has a deal to sell its private brands and two manufacturing facilities in the U.S. and Canada to Shearer’s Foods of Massillon, Ohio, for $430 million. Snyder’s-Lance acquisition of its supplier, Baptista’s Bakery Inc., which makes its Snack Factory Pretzel Crisps brand, has an undisclosed price. Under the transaction terms, Snyder's-Lance will acquire 100 percent of Baptista's Bakery, Inc. and its manufacturing facility.

In a release about the acquisition, Carl E. Lee, Jr., President and Chief Executive Officer of Snyder's-Lance notes “Baptista's is a company that has excelled in providing product quality and innovation while commercializing production in ways that are effective.  By combining the resources and expertise of Baptista's with the scale of Snyder's-Lance, we will accelerate our ability to deliver on-trend snacks and product innovation, while expanding our 'better-for-you' products and gaining needed capacity.”

While the term "healthy snacking" seems like an oxymoron, many consumers do love the possibility of having the best of both worlds.  According to a 2012 Mintel survey, 42 percent of individuals make it a point to snack on healthy foods.  Although there has been double-digit growth in the healthy snack markets from Fresh/Refrigerated Fish, Vegetables, and Salads to Meat Substitutes and Cereal/Fruit/Muesli Bars; there are still pockets of growth in niche product categories that companies can take advantage of.  

A large slice of the U.S. snack business is  held by PepsiCo, which owns 40 percent of the sector — a share that poses difficulties for the smaller, niche brands that are trying to stay relevant or break into the industry.  This acquisition could position Snyder’s-Lance in a way that it can differentiate its product from the competition and seize a greater market share.