Snyder’s-Lance has gained a sturdy innovation platform and access to new retail entry points following the purchase of Snack Factory, its CEO said.
Last week the US snacks firm acquired the pretzel crisp specialist Snack Factory for $340m cash. The deal is set to close early in the fourth quarter of this year.
In its investors call, Dave Singer, CEO of Snyder’s-Lance, said the purchase will enable the firm to broaden its portfolio and retail presence.
“The real opportunity here is the growth opportunity – using their railroad tracks to move our products in,” Singer said.
“It’s about using their sales, marketing and organisation to expand,” he added.
Snack Factory’s pretzel crisp brand has tripled in sales value over the last three years, according to the CEO, and is the fastest growing brand in the US premium snacking sector.
Lucrative deli opportunities and innovation
Snack Factory operates on a direct distribution model, whereby the company delivers its pretzel crisps directly to the deli sections of supermarkets where its presence is robust.
“This direct model is very strong and will be maintained,” Singer said.
It also opens up a new area of the store for Snyder’s-Lance products to be sold in, he added, which is an exciting development.
Carl Lee, president and chief operating officer at Snyder’s-Lance, said the buy is an important one.
“With this acquisition comes an innovation platform which should enable more selection and variety for customers in the long-term,” Lee said.
The firm plans to utilise Snack Factory’s solid innovation platform to create new ideas and underpin new product development (NPD).
In February 2012, Snyder’s-Lance outlined its growth strategy that would be focused on driving three core brands; Snyder’s of Hanover pretzels, Lance sandwich crackers and Cape Cod potato chips.
“Snack Factory’s pretzel crisp will become the fourth core brand,” Singer said.
“We see this growing faster than other core brands – outpacing them,” he said.
“Actual cash value (ACV) is very strong already and there is still room for growth and further development,” he added.