Hershey has agreed to acquire Pirate Brands for $420 million, adding more “better-for-you” products to its snacks portfolio as it continues to diversify from its core candy business.
The deal gives Hershey rights to two cheese puff brands, Pirate’s Booty and Smart Puffs, as well as Original Tings cheese sticks. Pirate Brands is currently owned by B&G Foods, which acquired it for $195 million in 2013.
Hershey CEO Michele Buck has made it her goal to turn the company into an “innovative snacking powerhouse” as health-conscious consumers opt for more nutritious, natural offerings over sugary candies and chocolates.
The Pirate Brand products will operate within Amplify, Hershey’s better-for-you snacking division.
“Pirate’s Booty is a leading cheese puffs brand loved by moms and kids as a better-for-you treat,” Mary Beth West, Hershey’s chief growth officer, said in a news release. “We expect the full Pirate Brands portfolio to be a great fit for Hershey’s growing Amplify business which is targeted toward consumers who are looking for great-tasting snacks without compromise.”
Hershey acquired Amplify Snack Brands for $921 million last year, expanding its snacks portfolio with products such as SkinnyPop popcorn and Paqui tortilla chips. It also bought beef jerky maker Krave in 2015 and Ripple Brand Collective, the maker of barkTHINS snacking chocolate, in 2016.
The Amplify products increased Hershey’s North American net sales by 5.6%, according to the company’s most recent earnings report.
“While the Amplify acquisition brought a top snack brand to Hershey … more household name brands can help the company dig up more treasure in the snacking category,” Food Dive said. “Pirate Brands’ snacks are successful, fitting into the better-for-you snacking niche that many companies crave.”
The publication noted that Pirate Brands has “performed extremely well” for B&G, with net sales increasing 54.6% in the most recent quarter. According to Hershey, cheese puffs are a $2.5 billion business and Pirate’s Booty sales have grown 8% year over year.
Other recent acquisitions of snack makers have included Conagra’s $10.9 billion deal for Pinnacle Foods in June.