Diamond Foods bets big on ready-to-eat popcorn as category tops $600m

10-Jun-2014 - Last updated on 11-Jun-2014 at 01:16 GMT

While microwave popcorn is in decline, sales of ready-to-eat popcorn have been growing strongly in recent years, says Diamond Foods

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The US ready-to-eat popcorn category has been “growing in the double-digits for the past 3-4 years” and is now worth “north of $600m in annual [retail] sales”, according to Diamond Foods CEO Brain Driscoll, who says new launches under the Kettle and Pop Secret brands will hit stores this month.

Speaking to analysts last week after posting a net loss of $105.6m in the third quarter, Driscoll said: “We anticipate the [RTE popcorn] category to continue to grow and we’re hopeful that we’re going to have a decent part of the share of the categories [when] we establish our footing with our two new brands.”

Within the category, 'natural' brands are performing the most strongly, which is good news for Kettle, which has a 'natural' positioning, added Driscoll: “The ones that are growing fastest are the ones that have clean label, all natural, they are outpacing the entirety of it, they are driving the growth.”

While the Pop Secret brand of microwave popcorn had performed really well over the quart, the overall microwave popcorn category is down, he said.

"Frankly we also recognize that the category has been in decline and that’s why we felt the need to launch into ready to eat popcorn; but we’re going to continue to innovate in microwave."

US retail sales of products under the Kettle and Pop Secret brands both grew in the double-digits in the third quarter, while overall net sales grew 3.2% to $191m, said Driscoll.

The $105.6m net loss was blamed on higher walnut costs and expenses related to debt refinancing.