New brands, gluten-free highlight innovation efforts at Snyder’s-Lance
by Eric Schroeder
CHARLOTTE, N.C. — A robust new product line-up that is “on trend” and “up-to-date” with consumer expectations has executives at Snyder’s-Lance, Inc. optimistic about the coming year.
For starters, the Charlotte-based snacks maker has been pleased with initial response to Quitos, a new brand of rolled tortillas, corn chips and pork skins introduced this past summer. Some companies have been reluctant to launch new brands in recent years, but Snyder’s-Lance saw an opportunity with Quitos.
“I think if you take a look at the product itself, it’s a high quality, high value product with the rolled tortilla chip,” Carl Lee, president and chief executive officer, said during a Nov. 7 conference call with analysts. “It’s much bigger than just rolled tortilla chips. There’s some very important pork rind products in there as well, and some corn-based products that gives us a little variety. The key there is that this is going to be pretty much an up-and-down the street type item. You’ll see it in our C stores.”
This quarter, Snyder’s-Lance will look to grab a piece of the growing gluten-free market with the launch of gluten-free pretzel sticks in such flavors as Hot Buffalo Wing and honey mustard and onion.
Mr. Lee said the company expects the products to be a hit with consumers “who want great taste and exciting flavors.” The products primarily will be sold in the gluten-free section of stores. In stores where gluten-free sections do not exist, the products will be shelved in the snacks section.
“We made sure the packaging would stand out,” he said. “We have two gluten-free items out there now that have done phenomenally well this year, and adding these two new ones, and updating our packaging, we expect to continue to see tremendous growth as more and more people include that in their diet.”
The bulk of innovation, though, is slated for 2014, when new products will be launched under the Snyder’s of Hanover, Lance, Cape Cod and Pretzel Crisps brands.
“We have a variety of new products on the way for 2014 to support our fast-growing Pretzel Pieces line,” Mr. Lee said. “For example, we’re going to have a new offering of spicy pretzels that deliver a unique crunch and texture, along with a sweet line to satisfy consumer’s desire for great snacking. We have several other new products on deck for (Snyder’s of Hanover) that we’ll be introducing in the coming months.
“Now, focusing on Lance, we’re beginning to roll out our improved graphics in our home-pack line of products, contemporizing the look and feel of our product with our new closed carton packaging. Our new line of highly flavored sandwich crackers for 2014 have been met with very positive reception from our retailers and is expected to reach new consumers that prefer spicier and bolder flavors.
“Cape Cod is seeing innovation in both packaging and product offering for 2014. First, we’re expanding our very successful waffle cup line with new flavors and packaging enhancements to call out attention to this highly differentiated product.
“Lastly, we’re introducing new popcorn items in the Cape Cod line to respond to consumer requests and a very favorable category dynamics. And Pretzel Crisps — our fast growing line — will be introducing two new flavors this coming year that complement the already exciting items that we already have in the deli section.”
Net income at Snyder’s-Lance in the third quarter ended Sept. 28 was $22,899,000, equal to 33c per share on the common stock, up 29% from $17,765,000, or 26c per share, in the same period a year ago. Net revenue increased 11% to $453,023,000.
For the nine months ended Sept. 28 net income was $55,721,000, or 80c per share, up 9% from $51,304,000, or 75c per share. Net revenue was $1,310,646,000, up 9% from $1,198,808,000.
The company revised its estimates for the full year 2013, lowering its expectations for net revenue to be up 9% to 10%, down from 10% to 12% forecast in the second quarter, and earnings per share up 25% to 30%, up from 22% to 32%.