- Snack maker Snyder’s-Lance is consulting with an investment bank to weigh a potential sale after it was approached by Campbell Soup and at least one other company, according to CNBC.
- Snyder’s-Lance owns brands such as Cape Cod potato chips, Archway cookies, Snyder’s pretzels and Pop Secret popcorn. Snyder and Lance merged in 2010, and acquired Diamond Foods in 2016. Campbell Soup, a $14 billion company, has been focusing on expanding its organic and better-for-you offerings, most recently with the purchase of Pacific Foods.
- CNBC cautioned that talks are continuing, but there is no guarantee that a deal will be reached between Campbell Soup or another company.
As U.S. consumers’ penchant for snacking continues to grow, it makes sense that a snack-focused company like Snyder’s-Lance would be a desirable acquisition for a large manufacturer. Big Food has experienced difficulty innovating in-house, and has turned to M&A to acquire brands that are in line with today’s consumers needs.
All of Snyder’s-Lance products, ranging form nuts, pretzels, chips, crackers and popcorn, are squarely positioned to benefit from the snacking trend. The individual snacking category reached $33 billion in the U.S. this year, as annual household spending on snacks increased to $133, about 1.1% over 2016's total, according to a Nielsen study.
As people nibble on small meals more throughout the day, it’s understandable that Snyder’s-Lance would be attractive to larger CPG manufacturers desperate to expand their role in the space as their core packaged and processed products businesses struggle.
Campbell Soup recently posted a tough quarter as its iconic soup division saw a 9% decline in sales in the U.S. Its Campbell Fresh division, which includes Garden Fresh Gourmet and Bolthouse Farms, was also flat compared to a year ago.
Campbell Soup and other packaged food manufacturers have faced an exodus of consumers fleeing processed foods in favor of more natural, organic and better-for-you items with a list of recognizable ingredients. So far, acquisitions and repositioning their own brands to have a cleaner label profile have not been enough to help stabilize these companies, boost sales and position them for future growth.
While Campbell Soup is unlikely to deviate from expanding its fresh division, which remains a strong part of the company's future, a purchase of Snyder’s-Lance would significantly grow its snacking arm, which now includes brands such as Pepperidge Farm, Goldfish crackers and even V8.
Its uncertain who the other company might be that is looking at Snyder’s-Lance. Conagra Brands, fresh off it’s $250 million purchase of Angie’s Boomchickapop popcorn, is looking at more acquisitions. It’s possible Conagra is the other mystery suitor courting Snyder’s-Lance. Other potential buyers could include General Mills, Kellogg, Kraft Heinz or Mondelez.
For Snyder’s-Lance, which is looking to expand its customer base to include the all-important millennial, a deal would mark the culmination of a challenging 2017, punctuated by unexpected departure of its CEO earlier this year. It would likely benefit from Campbell Soup's wide distribution network and access to bulk ingredients. While a deal is uncertain, with few companies primed for the changing marketplace like Snyder's-Lance, it's no surprise that it's in the cross hairs of a potential acquirer.