- Hershey is investing an undisclosed amount in Quinn, a natural foods snack manufacturer, the companies said in a statement. The investment comes as part of Quinn's latest funding round where Hershey was a minority investor, joined by existing investors.
- Quinn said the funding will support new distribution and product innovation. The decade-old company sells its popcorn, pretzels and other snacks in more than 7,500 stores nationwide.
- The investment by sweets giant Hershey further expands its reach in snacking that has been a priority for the company in recent years. Since CEO Michele Buck took over in 2017, it has purchased Amplify, the parent company of popcorn brand SkinnyPop, acquired Pirate's Booty cheese puffs and protein bar maker One Brands.
Few trends in the food industry have been as prominent as snacking, and Hershey is making yet another investment to give it a stronger foothold in that space. When Buck took over as Hershey's CEO in March 2017, she set out to create a "snacking powerhouse" by accelerating growth in the company's hugely profitable confectionary business and expanding its portfolio into new snack offerings.
According to a study Mondelez conducted with the Harris Poll last year, snacking is preferred to eating meals for 59% of adults worldwide. For millennials, that figure jumps to 70%. The dependence on snacking has only intensified during the coronavirus pandemic, boosting demand for offerings from Hershey, Mondelez and Campbell Soup, among others. Since lockdowns began, 40% of people said they have been eating more snacks, Mondelez said in April.
While the investment in Quinn only gives the maker of Reese's, Kisses and Twizzlers a minority stake, it could enable Hershey to tap into the upstart's mission to focus on using real ingredients and a commitment to supporting agriculture and food transparency. As a growing number of consumers care about where their food comes from and how it's produced, many of whom vote with their purchasing dollars, Hershey could conceivably carry their mission to its other brands like SkinnyPop or Pirate's Booty.
"It's about keeping everything that we have that is wonderful [at Hershey] and then how do we take it to the next level because the world is changing more rapidly than ever before. The marketplace is changing. Consumers are changing," Buck said earlier this year. "You have to stay ahead of it."
For Quinn, the opportunity to have Hershey involved could pay major dividends as the company looks to expand. Quinn can tap into Hershey's efficiency in procuring ingredients, manufacturing, innovating and working closely with retailers. The fact that Quinn is only found in 7,500 stores, whereas Hershey's offerings are available in practically every location with food or candy products, will give the 10-year old brand a long runway for growth.
As more companies enter the snacking segment, the competition to grab coveted shelf space will only intensify. Quinn finds itself competing with offerings from deeper-pocketed CPGs such as Conagra Brands' ready-to-eat popcorn brand Angie's Boomchickapop, Campbell Soup's chips and pretzels added to the fold from its $5 billion Snyder's-Lance acquisition or countless offerings from snacking giant PepsiCo. Hershey will increase Quinn's chance of standing out.
"Hershey's keen eye for category disrupting brands and building them into household names makes them an invaluable partner," Kristy Lewis, founder and CEO of Quinn, said in a statement.
As the food and snacking landscape further changes, especially if people spend more time at home once the coronavirus has abated, big food companies like Hershey and fast-growing upstarts such as Quinn are likely to enter into more deals like this one that place each company in a better position to compete.