Snyder's-Lance sets path for growth

by Eric Schroeder
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Snyder's of Hanover pretzels, Snyder's-Lance
Snyder's-Lance's Snyder’s of Hanover brand has an opportunity to roll out nationwide distribution.
 

PARIS — Snyder’s-Lance, Inc. has its sights set on a number of pockets of growth, from expanding distribution of key brands across the United States to exploring ways to break into new categories, said Alexander W. Pease, chief financial officer and executive vice-president.

In a June 13 presentation at the Deutsche Bank Global Consumer Conference in Paris, Mr. Pease discussed the ways the Charlotte, N.C.-based snack maker is differentiating itself in a fiercely competitive snack industry.

Alexander Pease, Snyder's-Lance
Alexander Pease, c.f.o. and executive vice-president of Snyder’s-Lance

Mr. Pease said the company’s Northeast-focused Snyder’s of Hanover brand has an opportunity to roll out nationwide distribution and intends to push the brand’s consumer base beyond the boomer segment and into the millennial segment. Similarly, the company’s Lance sandwich crackers, a Southeast dominated brand, may go national.

“Gaining cross-country distribution … is clearly an opportunity,” he said.

Late July chips and Snack Factory pretzel crisps, Snyder's-Lance
Snyder's-Lance also sees growth opportunities in expanding the Snack Factory and Late July brands to the perimeter of the store.
 

Mr. Pease said the company also sees growth opportunities in expanding the Snack Factory and Late July brands to the perimeter of the store.

One brand that is struggling to generate growth is Pop Secret, the company’s microwave popcorn brand.

“It's a boomer-focused category,” Mr. Pease said of microwave popcorn. “We’re the No. 2 player. And so there’s some work that needs to be done around reminding consumers of the event. And really evaluating what can be done to stabilize that category, in and of itself.”

Pop Secret kettle corn, Snyder's-Lance
The one Snyder's-Lance brand struggling to maintain growth is Pop Secret.
 

A little over a year after acquiring the Kettle chips business as part of its acquisition of Diamond Foods, Snyder’s-Lance continues to look for ways to drive future growth for the brand. A heavily millennial-oriented brand, Kettle stands for bold flavors and frequent flavor rotations, Mr. Pease said, a formula that has worked for the brand. Now, the company is trying to find the right balance to fuel growth.

“We’ve gone from 34 flavor profiles to 70 over the course of 10 or 12 months,” Mr. Pease said. “We have no intention of going to half a dozen flavors of Kettle. That would be sort of death for the brand, given the target — the millennial consumer that we’re targeting. What we are saying is that they’ve had a very successful and profitable growth run — at 35 s.k.u.s (stock-keeping units). So maybe there needs to be more than 35 but probably not all the way to 70. And so getting that formula right will be important.

Kettle Brand chips, Snyder's-Lance
Snyder’s-Lance continues to look for ways to drive future growth for Kettle Brand chips.
 

“(Kettle is) largely a West coast-dominated brand. There is clearly opportunity on nationwide distribution for that brand to really fuel the growth. There’s also opportunity through the direct-store-delivery channel that we brought to the acquisition party. It was largely going direct to the market, which limited it more to the natural channel. We’ve got opportunities in club; we’ve got opportunities in the natural section of the traditional grocery retailers. We’ve got opportunities in small bag format and food service. So there’s a lot of potential for that brand.” 

Another area of opportunity exists in the cracker aisle, where Mr. Pease said Snyder’s-Lance is underpenetrated. Although the company has a strong presence in sandwich crackers it is “basically nonexistent” in the categories adjacent to sandwich crackers, he said.

Wholey Cheese crackers, Snyder's-Lance
Snyder's-Lance recently introduced Wholey Cheese! baked crackers.
 

“We did introduce a cracker innovation aligned with the Snyder’s of Hanover brand called Wholey Cheese!, which is giving us a new set of facings in the cracker aisle directly aligned with a large competitor in that space, but there is still more room to go in the cracker aisle,” Mr. Pease said. “Bars, which you mentioned are an opportunity that we effectively don’t play in. That’s a pretty significant growth opportunity. We like meat snacks as an adjacency — obviously that’s one of the fastest-growing categories. So we see a number of opportunities both in the center of the store as well as in the perimeter.”

Meanwhile, Mr. Pease said Snyder’s-Lance sees M.&A. as “a big piece of the growth algorithm going forward.” While the company doesn’t expect to make a broad move into dairy or frozen products, he said potential acquisitions in adjacent categories are part of the growth formula for the company. Before that happens, though, Snyder’s-Lance is focusing on ensuring its platform is stable, he said. The company will consider all options, he said, including divestments.

Lance sandwich crackers, Snyder's-Lance
Lance sandwich crackers, a Southeast dominated brand, may go national, Snyder's-Lance said.
 

“The two candidates in the portfolio that are obviously worth continuing to monitor are Pop Secret, given the category trends that we’ve seen,” he said. “We feel confident in our ability to renovate that brand. And we feel as though we’re the natural owner for the time being. But obviously, we’ll have to continue to monitor that as the situation develops.

“And then Emerald, which plays in the snack nuts category, is quite small. So it’s only a 3% share in the overall snack nuts; Planters is the owner of the peanut subcategory. Blue Diamond is the owner of the almond subcategory. We view a significant opportunity in cashews, lining up some of our seasoning capability that we bring to the party with the Kettle brand, with the ability of cashews to basically be a good vehicle for seasoning. So we see a good opportunity there to make Emerald meaningful in this space, but obviously that would be one that we have to evaluate if we can’t get to No. 1 or No. 2 position.”
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