Diamond Food’s expands healthy, natural snack offerings under Kettle and nut brands

By Elizabeth Crawford contact

- Last updated on GMT

Diamond Food’s expands snack offerings under Kettle and nut brands

Related tags: Popcorn

Efforts by Emerald Premium Snack- and Kettle brand chip-maker Diamond Food’s Inc. to meet consumer demand for healthy, natural and convenient snacks are paying off with sales climbing 2.5% to $662.4 million in the first three-quarters of the year, company executives report. 

“As we continue to think about our long term vision for the company, we are encouraged by the progress we are making to strengthen our brand alignment with consumer trends for nutrient-dense, convenient protein and salty snacks with natural, organic, gluten-free and non-GMO product attributes,”​ CEO Brian Driscoll told investment analysts June 4 during the firm’s third-quarter earnings report.

For example, he noted by the end of fiscal 2016, the firm expects 70% of its North American sales will come from products that are Non-GMO Project Verified, which will help meet consumer demand for a “clean label,”​ Driscoll said.

The trendy verification also “puts us in a competitively advantageous place, which also ought to add some ability for us to price as the commodities move,”​ he added. This flexibility will be particularly useful for passing on to the consumer the higher cost of nuts, sold under the firm’s Emerald and Diamond of California brands, production of which is impacted by the ongoing drought in California.

The firm also is “actively evaluating additional opportunities to deepen our participation in on trend categories through new product innovation,”​ said Driscoll.

This will include the national launch later this summer of three new flavors of fried Kettle chips – pepperoncini, Thick and Bold dill pickle and Thick and Bold Carolina barbecue, which tap into millennials’ demand for more distinctive and intense flavors.

The firm also will extend the Kettle brand’s organic potato chip line with three more new flavors – Sea Salt and Vinegar, Jalapeno and Baked Sea Salt.

“We think that these varieties are an important component to our growth,”​ as is the expansion of the organic chip line, Driscoll said.

He added the new flavors “also strengthen the overall equity of the brand itself. We think it builds on its credibility, its authenticity and its flavor reputation by putting in the new varieties.”

Driscoll also hinted that the firm will announce additional innovation under the Kettle brand during the next quarter. The innovations will take the already premium brand “into an even greater premium space with a very unique set of offerings that we hope to set us apart, and hopefully, build back in part some of the margin that we’ve lost and help stabilize and repair the top line,”​ he said.

While sales for the snack and nut segments, and overall, were strong for year to date, they were down for the quarter. Specifically, net sales fell 2.% to $186.1 million compared to the same time last year, mostly reflecting the firm’s exit from low margin nut snacks, Diamond reported.

New nut snacks

Diamond also plans to expand its already well-established foothold in the nut snack and baking categories with new product launches that will capitalize on consumers’ ostensibly insatiable demand for protein.

The firm will launch a line of Emerald Seasoned cashews that will leverage its famous Kettle brand’s flavor expertise with flavors such as jalapeno, sriracha and dill pickle, Driscoll said.

He added that their new line will not compete head on with other snack nuts as much as it did before.

The firm also plans to improve its share of nut sales in the backing aisle, which it will share next quarter ahead of the “critical fall baking season,”​ Driscoll said.

In addition, sales of the Emerald brand’s 100-calorie pack increased 14.4% in the previous three months, which outpaced the 2.9% growth for the snack nut category overall, the firm noted.

Not all snacks are succeeding

The company’s success with snacks does not hold true across the board, executives acknowledged.

Sales of the firm’s Pop Secret popcorn fell 2.3% in the quarter, due mostly to continued deep promotions from competitors in the microwave popcorn category, and from ready-to-eat popcorn, which is booming, Driscoll acknowledged.

The firm’s RTE Pop Secret line is not sell as well as the company would like, but “we haven’t given up on it,”​ Driscoll said. He explained the company “just got some new distribution on Pop Secret ready-to-eat that we feel pretty good about.”

He also said he feels good about the firm’s Kettle branded RTE popcorn. 

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