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We keep reading and writing about how consumers are seeking healthier food options, and there is no denying that it is true. Reflecting people’s efforts to avoid sugar and fat, companies that rely on confectionary sales, such as Hershey’s, have suffered sales declines and pressures. But even as they avoid sugars, it appears that consumers still can’t get enough salty snacks, so the strategy for food companies is to expand their product lines to include such addictive treats.

Rather than limiting itself to Kisses for example, Hershey Co. recently acquired the company that makes SkinnyPop popcorn, as well as the chip brands Paqui and Tyrrell’s. This expansion follows a previous acquisition of Krave Pure Foods, which produces beef jerky products. Thus Hershey is moving beyond sweet to savory, hoping that the variety can appeal to a broad range of consumers.

Campbell’s Soup Co. already had a range of products in its assortment, but it similarly has been undertaking various acquisitions to respond to consumer trends. Noting that even as sales of soup declined, its Goldfish brand of crackers held strong, the company saw a clear way forward. In purchasing Snyder’s-Lance Inc., it brings brands like PopSecret, Snyder’s pretzels, and Cape Cod potato chips into its portfolio. But it is not limiting its options to just salty snacks; Campbell also acquired the organic soup label Pacific Foods, and it made a substantial investment in a prepackaged meal service called Chef’d.

Beyond expanding their product portfolios to appeal to consumers’ new habits and preferences, such moves may signal the companies’ efforts to avoid outside control. For example, Mondelez International recently sought to take over Hershey, but the candy maker resisted the effort, determined to continue operating independently.

But the real driver is clearly the persistent trends in what consumers want. Even as the U.S. packaged food market has lost approximately $17 billion in revenue, popcorn, pretzels, and chips still remain strong sellers. People may be seeking meals dominated by fresh foods, such as by avoiding packaged cereals, but when it comes to snack time, they appear happy to make use of the convenient, tasty options provided by bagged snacks. They also might assume that salt is less of a risk than sugar or fat, despite consistent evidence that too much salt consumption can impose serious health risks.

Discussion Questions:

  1. How are companies such as Campbell’s and Hershey’s adjusting to account for consumer trends?
  2. What types of factors appear to be driving consumers’ changing preferences for snacks and other packaged foods?

Source: “With Acquisitions, Campbell, Hershey Bet that Salty Snacks Will Reignite Sales,” Advertising Age, December 18, 2017