Snyder’s-Lance renovating sandwich crackers platform

by Eric Schroeder
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Sandwich crackers deliver on convenience and protein platforms, said Snyder's-Lance.

CHARLOTTE, N.C. — Call it the company’s version of “Extreme Makeover.” Snack foods maker Snyder’s-Lance is calling on all hands to reshape its sandwich crackers business.

“A lot of us have had renovations at our home or maybe we built a new home and we’re all excited about when we walk into that new kitchen and get a chance to enjoy it for the very first time,” Carl Lee, president and chief executive officer, said during an Aug. 7 conference call with analysts to discuss second-quarter earnings. “But leading up to that is a lot of heavy lifting, a lot of dust and a lot of mess. And that’s exactly what we’re going through with our sandwich crackers.”

Despite the mess, Mr. Lee said he’s excited about the renovation. He likened it to the changes the company incorporated in its Cape Cod business 18 months ago.

“Cape Cod went through a very similar renovation back in 2012, where we went in and upgraded our manufacturing facilities to improve our capacity and our utilization and our quality,” he said. “Went through some heavy lifting there. We went in and … strategically dug into the brand and worked on our packaging, worked on our positioning, worked on our flavors, worked on our (limited batch) and did a lot of things to really improve the overall franchise, and now because of that we’re enjoying some incredible growth.”

Changes to the Cape Cod chips line included introductions such as waffle chips in 2012 and an emphasis in 2013 on reduced-fat products.

Now, Mr. Lee said Snyder’s-Lance is going down a similar path with its sandwich crackers business.

“We’ve upgraded our packaging,” he said. “It takes a long time, though, to be able to transition all the s.k.u.s (stock-keeping units) because it’s important that you move them all over as quickly as you can. But it’s taken us about 15 months to do that because of all the lines that have had to be converted. We’ve also repositioned just the image and the marketing reach with it. But by being able to do that, as I mentioned earlier, Bolds has been successful, and we’ve been able to launch Bolds because of some of the renovation we’re putting our sandwich crackers through.”

Mr. Lee said the packaging conversion should be complete in October.

He admitted the sandwich cracker category is not performing as well as the company would like.

“We’re running into a little bit of head winds,” he explained. “We’re also running into some kind of self-inflicted changes that we need to go through as we renovate.”

Overall, though, Mr. Lee was upbeat about the ability of sandwich crackers to bounce back strongly.

“I’m excited about sandwich crackers because if you take a look at the portability and the ability to deliver nutrition, ability to deliver convenience, to deliver protein and all the things consumers are looking for, there’s really no better format than sandwich crackers to be able to do that,” he said. “But we had to take time to go back and reposition the brand.”

In spite of some head winds on sandwich crackers, Mr. Lee said Snyder’s-Lance delivered 3% revenue and 3% volume growth in the category, which is a little higher than the overall averages of the company’s competitors.

Net income at Snyder’s-Lance in the second quarter ended June 28 was $11,677,000, equal to 17c per share on the common stock, down 10% from $12,979,000, or 19c per share, in the same period a year ago. Excluding special items, net income was $20,619,000, up from $16,903,000 a year ago. Net revenue totaled $399,596,000, up 6% from $378,489,000.

For the six months ended June 28, net income was $28,493,000, or 41c per share, down 13% from $32,822,000, or 47c per share, in the same period a year ago. Net revenue was $772,612,000, up 5% from $737,030,000.
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