- Snyder's-Lance says it has followed five growth strategies that have carried the company through the past decade, and particularly the last five years. Included in that is the $1.91 billion Diamond Foods acquisition earlier this year, which Snyder's-Lance president and CEO Carl Lee outlined during a presentation at the Jefferies Consumer Conference this week.
- The first three strategies include using product innovation and renovation with coordinated marketing campaigns to strengthen brands; focusing on continuous expansion of retail distribution; and maintaining an emphasis on product quality and continuous improvement in that area.
- The other two strategies include making decisions today that invest in the company's capabilities tomorrow, such as boosting productivity, cutting costs, and expanding margins to optimize returns on capital investments, and finally, making an investment in attracting the best employees and arming them with the tools they need to succeed.
At first glance, many of these strategies seem to be common sense, but Snyder's-Lance backs its growth plan and portfolio improvements with the necessary investments, both financial and creative. Brand value is central to the company, and Lee confirmed its focus on premium and differentiated positioning, which was solidified by the Diamond Foods acquisition.
Prior to Diamond Foods, most Snyder's-Lance products weren't necessarily associated with the better-for-you snacking category, with the exception of brands like Late July. But the company is working to align its portfolio with those consumer trends.
The company's effort to fund the future through cost-cutting and improved productivity and margins is also crucial as its organic sales have flatlined. In the most recent quarter, Snyder's-Lance reported a 15% boost to net revenue, though that figure missed analysts' estimates. Without the contribution of the Diamond Foods acquisition, net revenue dipped 0.7%.
Snyder's-Lance may be a snack-centric company, but despite rising snack consumption in the U.S., it hasn't been immune to the shortcomings of packaged foods overall. Also cost-cutting and improved margins could provide an additional buffer if extensive reformulations are necessary to meet the FDA's proposed sodium reduction targets or maintain label claims for the new Nutrition Facts panel.