Campbell Soup To Enjoy A $5 Billion Snack


Image source: Sheila Fitzgerald /

What's going on?

Global food company Campbell Soup announced on Monday that it intends to buy Snyder’s-Lance – the company behind Kettle Chips and Pop Secret popcorn – in a deal worth almost $5 billion.

What does this mean?

Campbell Soup may be best known for its soup products (and, of course, the famous Andy Warhol painting), but in recent years it’s seen sales decline there while its biscuits and snacks segment has continued to grow.

Since 2011, the company has taken over six smaller outfits, including Pacific Foods earlier this month. But Monday’s deal is by far the largest in the company’s history. As a result, almost half Campbell Soup’s sales will come from snacks (it’s about 30% currently) – effectively betting on a continuation of its positive momentum in this segment, helped by wellness and convenience trends among consumers.

Why should I care?

For the stocks: Looks like a delicious deal for all.

Investors in Campbell Soup should benefit from higher growth in the snack segment (tweet this), helped by its strong marquee brands such as Goldfish (although investors may be a bit nervous about the price it’s having to pay). Snyder’s-Lance investors gain a healthy premium to sell – as much as 27% above the stock price last week, when takeover rumors first surfaced.

The bigger picture: Food companies are craving growth.

Global food companies have seen sales growth deteriorate for several years, partially driven by rising competition from new entrants and ecommerce making it easier for these to sell directly to consumers. Snacks are one area within food showing continued growth (think: snacking on the go in a 24/7 lifestyle), and health and wellness remains a major trend amongst consumers – leading companies to acquire smaller brands and startups gaining traction in these areas. Monday’s announcement continues the industry trend of consolidation, following deals such as Kellogg buying the maker of RXBAR earlier this year and Mars’ recent investment into Kind Snacks.

Originally posted as part of the Finimize daily email.

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