Yahoo Finance Diamond Foods to Improve Snyder’s-Lance Presence in Healthier Snacks
Can the Diamond Foods Acquisition Expand Snyder’s-Lance's Reach?
Snyder’s-Lance focus on healthier snacks
Snyder’s-Lance (LNCE) is promoting “better-for-you” snacking options in hopes of greater revenue. This also appears to be part of the reason for its acquisition of Diamond Foods.
Rising demand for healthier snacks
Several key points here are:
Consumer demand for natural and organic products has been growing
According to the Nutrition Business Journal, in the last five years, natural and organic food and beverage sales in the United States grew at a CAGR (compound annual growth rate) of 15%, reaching $80 billion in 2015
According to IRI, a Chicago market research firm, snacking frequency in the United States rose in the last five years from 1.9 snacks a day to 2.8 snacks a day. In 2014, 51% of US consumers consumed more than three snacks a day
Snyder’s-Lance’s acquisitions in the snacks market
The company has completed three acquisitions in the healthy snack category in fiscal 2014, including:
Baptista’s Bakery, involved in the development and manufacturing of snack foods including organic, non-GMO (genetically modified organisms), all-natural, and gluten-free products
Late July, a maker of organic and non-GMO baked and salty snacks
The funds generated from the divestiture of private brands were more than sufficient to fund these acquisitions. Diamond Foods’ (DMND) acquisition could further strengthen Snyder’s-Lance’s offerings with Diamond Foods’ diversified portfolio of non-GMO and organic branded products. Diamond Foods sells its products under five brands, including Kettle Chips and Emerald.
Peer Group Comparison
Like Snyder’s-Lance, many food companies (XLP) (IYK) entered in the healthy snacks market:
Hershey (HSY) recently acquired Krave, a manufacturer of beef jerky snacks
In 2013, milk producer, The WhiteWave Foods Company (WWAV) acquired Earthbound Farms, an organic produce company in North America
In 2014, General Mills (GIS) acquired Annie’s, a natural and organic food company, to expand its presence in the US branded organic and natural foods industry
In early 2015, Mondelez International (MDLZ) bought Enjoy Life Foods, a small allergen-free snack food company, to tap consumer demand in the healthier and natural foods market
In an attempt to extend its presence in rapidly growing packaged fresh market, Campbell Soup (CPB) entered into an agreement in June 2015 to acquire Garden Fresh Gourmet, a leader in refrigerated salsa in the United States
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