Hershey to buy SkinnyPop owner Amplify for $1.6B
- Hershey will acquire Amplify Snack Brands, parent company of SkinnyPop, for $1.6 billion, or $12 per share, the chocolate maker said in a statement. Amplify's portfolio also includes Tyrrells potato chips, Oatmega protein bars and cookies and Paqui tortilla chips.
- The deal is expected to generate annual synergies of about $20 million during the next two years from cost savings and portfolio optimization, according to a company release.
- This purchase is one of the first major initiatives led by Michelle Buck who became CEO of Hershey in March. "The acquisition of Amplify and its product portfolio is an important step in our journey to becoming an innovative snacking powerhouse as together it will enable us to bring scale and category management capabilities to a key sub-segment of the warehouse snack aisle," Buck said in the release.
Hershey's purchase of Amplify extends the chocolate giant's reach in the $33 billion snack space, pushing it ahead of rival candy makers looking to innovate in the trending category.
Changing consumer habits — driven by interest in complex texture and flavor profiles and demand for on-the-go food solutions — have spurred a wave of salty-sweet innovations in the confection space. Snacks have proven to be a bright spot for manufacturers who are otherwise struggling to find growth.
CEO Michelle Buck has stated that it's her mission to diversify Hershey's portfolio and become "an innovative snacking powerhouse." The strategy has brought sweet results so far. The company's most recent earnings were bolstered by 1.6% sales growth in its North America segment, driven particularly by the roll out of its Hershey's and Reese's Popped Snack Mix and Chocolate Dipped Pretzels.
The company also recently launched Cookie Layer Crunch Bars, made with layers of chocolate creme, chocolate cookie bits and milk chocolate, to appeal to "younger consumers and millennial consumers are looking for more multi-textural snacking experiences," Hershey's senior brand manager Ed Edson told Food Dive. Despite the product's sweetness, Edson said the company still considers it a snack because it blends "the snacking elements and the crunchability and munchability with a really indulgent Hershey chocolate wrapped around it."
While the majority of Hershey's in-house snack innovations lean toward the candy side of the snack space, it's acquisitions have brought in savory and healthy products to balance out its portfolio. The company snapped up meat snacks maker Krave Pure Foods in 2015, and acquired Ripple Brand, the parent company of better-for-you chocolate snack maker barkTHINS in 2016.
Hershey's deal with Amplify follows this trend, and looks like it could be a very lucrative move. SkinnyPop is currently the largest brand of popcorn in the U.S., taking up almost 25% of category market share. But it's position hasn't gone unchallenged — more companies are entering the popcorn space, creating fierce competition. ConAgra recently bought Angie's popular Boomchickapop popcorn brand, and private-label products are the fourth largest player in U.S. popcorn.
It's likely that Hershey's takeover of Amplify will fuel further acquisitions by candy makers in the snack space. The trend has already caught fire across categories — Mars recently took a minority stake in KIND bars. For now, Hershey's Amplify buy has given the candy maker a lead in the race to consolidate a snacking empire, but rivals are hungry to take a bigger bite out of the category, and may not be far behind.
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