With its diverse portfolio, Hormel is concentrating on snacks
- Convenient snack foods are one of three growth strategies Hormel believes will drive sales for the company in the future, President and COO Jim Snee said during a presentation at the Barclays Global Consumer Staples Conference last week, according to a report in Food Business News.
- Hormel is focusing on two snacking subcategories in particular: on-the-go and parties.
- Meat snacks have played a dominant role in Hormel's snack innovations, including Rev Wraps and the forthcoming Rev Bites. But the company has also explored snack varieties like Skippy PB Bites and Justin’s Snack Packs.
Hormel's party trays have been a hit for snacking at social gatherings, which is an occasion that not many other packaged food manufacturers have embraced. While many snacks are focused on convenience and single-servings, party trays provide a more interactive experience with the product. It's a different way to consider snack-friendly product development, and Hormel has the right opportunity and brand base to corner the party tray market.
The company also can explore both sweet and savory snacks with its current portfolio, including the recent acquisition of Justin's nut butter products. Justin's offers a premium, better-for-you counterpart to Skippy peanut butter, so Hormel can remain competitive at different tiers within related snack segments. As more private label brands adopt a segmentation strategy, a multitiered approach could help Hormel keep sales on track even as competition increases.
But as popular as meat snacks are, Hormel could face supply issues that hamper production or profitability. Pork and poultry, two staple ingredients in many Hormel products, have suffered due to animal diseases like PEDv and the bird flu in recent years. The company had to cut jobs from its Jennie-O Turkey Store brand in May 2015 because of the hit it took from the bird flu outbreak.
Also, not every snack innovation is going to be a success. Spam, one of Hormel's most iconic brands, spun off Spam Snacks for a brief time. But after only six months, the company discontinued the product because the launch did not meet company expectations, Hormel said in a statement. Hormel will have to carefully weigh its innovations to prevent another flop.