Hershey Expands Its Salty Snacks Business Through Popcorn Acquisition

The well-known producer of sweets and salty snacks, Hershey, is currently acquiring companies at a fast pace. Recently, the company has acquired two popcorn operations from Weaver Popcorn as a part of its ever adapting growth strategy.

Through this move, the company’s aim is to enhance the production capacity and flexibility of its rapidly expanding brand, SkinnyPop. Let’s take a closer look at this acquisition and its potential impact on Hershey’s overall business.

Hershey’s latest acquisition involves purchasing two popcorn plants located in Indiana and Pennsylvania. Although the purchase price and completion date of the deal have not been disclosed yet, this acquisition is part of Hershey’s strategy to acquire more manufacturing and brand companies. These acquisitions have helped Hershey establish a commanding presence in the $36 billion salty snacks category.

Hershey saw not having prior experience in popcorn manufacturing as a chance to enter the market and develop it promptly. They do currently own manufacturing capacity for their other two salty snack brands, Pirate’s Booty puffs and Dot’s Homestyle Pretzels, so by acquiring the popcorn plants from Weaver Popcorn, it enables their intention of accelerating growth in the popcorn category without any limitations.

The company’s current priority is to expand the salty snacks business, which they see as a chance for growth and a demonstration towards their ability to reach their goals, and new acquisition will provide them with a runway that will help to continually accelerate their growth.

Hershey’s current sales from salty snacks make up approximately 10% of their more than $10 billion total annual sales. The company has plans to increase this percentage to around 20% within the next decade. Now having acquired the two plants, they can begin their goal of expanding production capacity and flexibility for SkinnyPop, a brand that has been growing rapidly in the market.

According to Hershey, they can modify their production lines within a week to meet the changing demands of customers for a certain product or swiftly introduce a new product to the market. It can be challenging to accommodate unexpected production changes with co-manufacturers who work with multiple clients and usually plan production schedules on a monthly or quarterly basis, but this move should now aid in addressing and better managing these challenges in the future.

By owning the facilities, Hershey will have a more hands-on experience with popcorn production, which will give them useful knowledge to create innovative products. The new flexibility gained by Hershey allows for easier rollout of new product innovations or packaging types, expanding their ability to reach new consumption occasions. 

To summarise, Hershey’s has acquired two popcorn operations from Weaver Popcorn as a strategic move to expand their salty snacks business. The company’s salty snacks division has been experiencing rapid growth since 2017, indicating that they are on track to achieve their goal of expanding this sector to approximately 20% within the next ten years.

Hershey expects that acquiring the two popcorn plants will increase their production capacity and speed up growth in a category that has a lot of potential. It will be exciting to see how this acquisition plays out for Hershey’s overall business in the future.

News Credits:  Hershey buys 2 popcorn plants to fuel growth of its SkinnyPop brand

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