Campbell Soup to Buy Snyder’s-Lance for $4.5B

Campbell's biggest-ever acquisition will nearly double its baked-snack sales as it continues to diversify beyond its traditional soup business.
Matthew HellerDecember 18, 2017

Campbell Soup on Monday announced the largest deal in its 148-year history, agreeing to acquire Snyder’s-Lance for $4.87 billion in a move that will nearly double its baked-snacks revenue.

Snacks have become a popular category for food companies as consumers shift to food they can eat on the go. The U.S. snacking market is worth roughly $89 billion, according to IRI, and growing at a compound rate of nearly 3%.

With the acquisition of Snyder’s Lance, baked snacks will generate roughly 46% of Campbell’s annual net sales, up from about 31% in fiscal 2017. Snyder’s Lance makes such products as Pop Secret popcorn and Pretzel Crisps and its net sales grew at a compound rate of 11.5% between 2012 and 2016.

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Campbell’s traditional soup business will now represent about 27% of its annual net sales.

“This acquisition will dramatically transform Campbell, shifting our center of gravity and further diversifying our portfolio into the faster-growing snacking category,” Campbell’s CEO Denise Morrison said in a news release.

As CNBC reports, the deal is the boldest in a series of moves by Campbell to diversify beyond the core soup business. In 2012, it acquired dressing, beverage and vegetable company Bolthouse Farms for $1.55 billion and, earlier this month, completed its $700 million acquisition of Pacific Foods.

“Pressure on Big Food to do larger deals that can make a more immediate impact has heightened over the past year,” CNBC noted. “Beyond slowing sales, food companies are working with increasingly punishing retailers that are under their own pressure as shoppers pick up their food staples at convenience stores and, increasingly, Amazon.”

Campbell’s said the acquisition of Snyder’s-Lance “will accelerate Campbell’s access to faster-growing distribution channels including the convenience and natural channels.”

Diane Shand, senior director of corporate ratings at S&P Global, said Campbell has been focusing on increasing their snacking business. “The consumer is much more into snacking than eating three meals a days,” she told USA Today.

Campbell’s baked-snacks portfolio generated about $2.5 billion in net sales in fiscal 2017 while Snyder’s-Lance reported $2.2 billion in net sales for the 12 months ended Sept. 30.