BOCA RATON, FLA. — In the universe of consumer packaged foods companies, Snyder’s-Lance, Inc., Charlotte, N.C., stands out as a “pure play snack company,” said Carl E. Lee, president and chief executive officer.
In a Feb. 21 presentation, Mr. Lee described how a regional business has been transformed into a national snack foods company well aligned with emerging consumer trends. He spoke during the Consumer Analyst Group of New York annual conference at the Boca Raton Resort and Club in Boca Raton.
|Carl E. Lee, president and c.e.o. of Snyder's-Lance|
“We are in premium, differentiated categories where we can build a leadership position,” he said.
The 2010 merger of Snyder’s of Hanover with Lance Inc. was a key initial step toward giving Snyder’s a nationwide footprint in the snacks foods business.
“We decided we needed national direct-store delivery that would create ‘railroad tracks’ that would allow us to add other brands,” he said.
That’s exactly what Snyder’s-Lance did in the years that followed with acquisitions of Snack Factory (the Pretzel Crisp brand) in 2012 and Late July organic snacks in 2014. In February 2016, the company acquired Diamond Foods, Inc.
During this period, from 2010-16, Snyder’s-Lance achieved 10% compound annual sales growth (3% organic sales growth) and 20% compounded annual earnings-per-share growth.
Mr. Lee emphasized the importance of steps the company took beyond acquisitions, shedding non-core businesses, including a private label biscuit and cracker business and the Diamond of California walnuts business.
Today, the company has leading positions in the pretzel (40% share), sandwich cracker (43%) and kettle chip (41%) markets with significant position in microwave popcorn and deli aisle pretzels.
The company has made a carefully considered shift toward better-for-you snacks, as defined by products with validated claims such as non-G.M.O., gluten-free, peanut free, no preservatives and organic. The share of sales falling into the better-for-you category has risen from 25% in 2014 to 33% in early 2017 and is expected to be at 40% before the end of the year and at 50% not too far into the future. New products in this segment include Wholey Cheese, a gluten-free product that marks the company’s entry into the cheese cracker business.“We’re focused on better-for-you products, but that’s not all we’re focused on,” Mr. Lee said. He said 50-50 would be a good balance between better-for-you and traditional products.