KANSAS CITY — The morning snacking occasion is big, and Hostess Brands, Inc. doesn’t want to miss out.
In a March 10 presentation at the UBS Global Consumer and Retail Virtual Conference, Andrew P. Callahan, president and chief executive officer of Hostess, acknowledged that the Kansas City-based company is “a relatively small piece” of the $4.5 billion morning snacking market. But that is changing.
“Back in 2018, when I joined, if you look at sweet baked goods, we were a 15.5% share of that market,” Mr. Callahan said. “If you look at the latest data over four weeks, we’re about over a 20% share of that market. So we’ve added nearly five points of share within sweet baked goods of the breakfast subsegment. That is meaningful.”
Mr. Callahan said Hostess has been able to achieve growth behind a strategy focused on consumer insights, innovation and acquisitions. In the case of acquisitions, the company has added assets in recent years that have provided the capability to add new types and forms of products. He mentioned Jumbo Donettes as an example.
“We had some of (these assets), but we’re able to really scale them up and take some of the lower margin distribution and … transition it into a higher-margin Hostess breakfast growth,” Mr. Callahan said. “So we’ve been able to grow. We’ve been able to grow meaningfully. And we believe we’re just getting started because the addressable market is still so large. And it’s a very attractive market because it’s growing.
“So really a lot of good stuff going on there, both in share, both in focus and innovation, our insights, and it has a long runway to go. We’re just really getting started.”