Buyouts, Mergers Chip Away at Big Snack Food Cos.
Bite-sized snacks mean big business. Independents that make snacks are growing through joining forces and jockeying for position against bigger makers like Frito-Lay, PepsiCo and P&G.
Snack foods are no longer an occasion food-they are mainstays for busy consumers and those with voracious appetites for all things salty and savory. The snack food industry, which comprises some 500 companies, including the likes of Frito-Lay, Kettle Foods, Nabisco and Pringles, is concentrated, with the Top 50 firms generating 90% of the revenue. Selling chips accounts for the largest percentage of sales–about one-third– industry-wide. But recent merger and acquisition activity among independent snack food makers proves that these little bite-sized brands mean big business.
The common thread among these mergers and acquisitions is a push to join forces with other independents as they position themselves against bigger snack makers that have a broader reach and deeper pockets to fund growth. Merging their operations gives their distribution networks traction and allows them to leverage several more popular brands.
One example relates to two regional chip makers. Family owned and operated since 1921, Utz Quality Foods, Hanover, Pa., has been making potato chips for the mid-Atlantic coast at rates now around 1 million lb. a week. Utz also supplies pretzels, cheese curls, pork rinds and popcorn. The company has become the largest independent privately-held snack brand in the United States. When fellow Zapp’s potato chip manufacturer Zappe Endeavors lost its founder Ron Zappe, who died in June 2010, company executives looked for a way to keep the snack food firm and its bayou brand name from getting stale. It was then announced in January that Utz agreed to acquire the Zapp’s chips business that had become deeply rooted in Gramercy, La., since 1985. Zapp’s chips are kettle-cooked in peanut oil and distributed across several Southern states. As part of the deal, Utz plans to add the Zapp’s, Dirty and California potato chips brands to its products portfolio. Together, the chip makers would become a bi-coastal operation.
Further, Utz has been eyed by Snyder’s of Hanover as a target for purchase, but the deal fell through as the two firms believed that the purchase would have been held up by the Federal Trade Commission. Snyder’s then began setting its sights on Lance.
Case in point: consumers can find several other pertinent snack makers that are starting to munch away at big players like Frito-Lay.
Source: www.bizmology.com
Snack foods are no longer an occasion food-they are mainstays for busy consumers and those with voracious appetites for all things salty and savory. The snack food industry, which comprises some 500 companies, including the likes of Frito-Lay, Kettle Foods, Nabisco and Pringles, is concentrated, with the Top 50 firms generating 90% of the revenue. Selling chips accounts for the largest percentage of sales–about one-third– industry-wide. But recent merger and acquisition activity among independent snack food makers proves that these little bite-sized brands mean big business.
The common thread among these mergers and acquisitions is a push to join forces with other independents as they position themselves against bigger snack makers that have a broader reach and deeper pockets to fund growth. Merging their operations gives their distribution networks traction and allows them to leverage several more popular brands.
One example relates to two regional chip makers. Family owned and operated since 1921, Utz Quality Foods, Hanover, Pa., has been making potato chips for the mid-Atlantic coast at rates now around 1 million lb. a week. Utz also supplies pretzels, cheese curls, pork rinds and popcorn. The company has become the largest independent privately-held snack brand in the United States. When fellow Zapp’s potato chip manufacturer Zappe Endeavors lost its founder Ron Zappe, who died in June 2010, company executives looked for a way to keep the snack food firm and its bayou brand name from getting stale. It was then announced in January that Utz agreed to acquire the Zapp’s chips business that had become deeply rooted in Gramercy, La., since 1985. Zapp’s chips are kettle-cooked in peanut oil and distributed across several Southern states. As part of the deal, Utz plans to add the Zapp’s, Dirty and California potato chips brands to its products portfolio. Together, the chip makers would become a bi-coastal operation.
Further, Utz has been eyed by Snyder’s of Hanover as a target for purchase, but the deal fell through as the two firms believed that the purchase would have been held up by the Federal Trade Commission. Snyder’s then began setting its sights on Lance.
Case in point: consumers can find several other pertinent snack makers that are starting to munch away at big players like Frito-Lay.
Source: www.bizmology.com
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