Dive Brief:
- Snyder’s-Lance recently outlined its growth plans at the Deutsche Bank Global Consumer Conference, according to BakingBusiness.com. National distribution, an increased focus on millennials and potential M&A is on the snack manufacturer’s agenda.
- The company is rationalizing SKUs too, including reducing the variety of flavors. The major reduction are likely to come in its Kettle brand business, which the snack maker picked up last year as part of its Diamond Foods acquisition. “We’ve gone from 34 flavor profiles to 70 over the course of 10 or 12 months,” CFO Alexander Pease said in his presentation. “We’ve had a very successful and profitable growth run at 35 SKUs. So maybe there needs to be more than 35, but probably not all the way to 70.”
- Some potential brand rejuvenation or even divestitures may be in the cards as well. The company said it is monitoring microwave popcorn brand Pop Secret, which has struggled to maintain growth as of late. Emerald Nuts could also be on the table because of its small 3% share next to category leader Planters.
Dive Insight:
Snyder’s-Lance is looking to expand its consumer base to include all-important millennials. It’s also looking to take offerings like Archway cookies and make them national brands. And building on last year's successful acquisition of Diamond Foods and the popular Kettle chips brand, more acquisitive growth could also be in the future.
With so many balls in the air — as well as financial uncertainty facing the company, which had an unexpected c-suite shakeup earlier this year — Snyder’s-Lance needs to succeed. But is the company biting off more than it can chew with its growth expectations?
The good news is that snacking is on the rise. On average, consumers eat about four to five snack foods a day, according to Datassential's MenuTrends Keynote snacking report. Now is an excellent time for Snyder’s-Lance to expand many of its long-time regional brands to the national stage.
However, the trend toward healthier eating and snacking options may not bode well for the company. Snyder’s-Lance’ brand and product portfolio — full of pretzels, popcorn and cookies — does not exactly scream "healthy." Consequently, the snack manufacturer may need to take a hard look at its portfolio and core products before setting large growth expectations.
Still, studies show that American eating habits may not be as healthy as consumers might like to think. People tend to overestimate the number of healthy snacks — like fruit, nuts, yogurt and vegetables — they eat per day. In reality, they eat more salty and crunchy snacks — like chips and pretzels. An estimated 48% of consumers ate at least one salty snack yesterday, according to Datassential’s report.
But competition to capture snacking occasions is on the rise too. Big brands like Frito-Lay, Nabisco and Keebler no longer rule the aisles. Snyder’s-Lance will face a host of emerging, health-focused categories and innovative specialty brands, from granola and trail mix to pita chips and protein bars.
Many U.S. manufacturers are also introducing or reformulating product favorites to be healthier. With its recently acquired Kettle chips brand, Snyder’s-Lance may be in the driver’s seat. As for the rest of its product portfolio, the snack maker will need to demonstrate unique and compelling appeals to bump other products off the shelf.