Dive Brief:
- Utz Brands will acquire the H.K. Anderson peanut butter-filled pretzel brand from Conagra Brands, according to a release.
- Utz said the acquisition will be funded from cash-on-hand and has a purchase price of less than $10 million. The deal is expected to close in November.
- This is the first acquisition from Utz since it was acquired by blank check company Collier Creek Holdings and went public on the New York Stock Exchange. The company said in the release the acquisition lets Utz to jump into the growing filled pretzel segment.
Dive Insight:
Just one month after going public, Utz is already growing its portfolio of packaged salty snacks. Utz is the fourth biggest salty snack company behind PepsiCo, Campbell, and Kellogg, according to Cheddar, and it is looking to get bigger through categories that have high potential for growth.
According to IRI data cited by Utz, pretzel sales increased 10% to $1.4 billion for the 52 weeks ending Sept. 6, a jump of more than $120 million compared to a year ago. From rods and sticks to nuggets and twists, Utz already has a wide portfolio of different varieties of pretzels, so H.K. Anderson will only broaden its presence in the category.
Utz CEO Dylan Lissette said in the release as the company looks to increase its share in the salty snack category through new products and geographic expansion, "this type of acquisition is tailor made" for them. "The approximate $100 million filled segment of pretzels is ripe for innovation and growth," Lissette said.
Conagra acquired the National Pretzel Company, which included the H.K. Anderson brand, from Brookstone Holdings in 2011.
When Conagra sold its private label business to TreeHouse Foods for $2.7 billion in 2015, it retained the H.K. Anderson brand because it had a "strong connection to its existing Consumer Foods business." But as Conagra has used M&A to stay ahead in the snacking space and acquired more trendy brands in recent years — including Angie's Boomchickapop and Duke’s meat snacks — it makes sense to unload H.K. Anderson.
As consumers have sought out more convenient eating in recent years, snacking has become increasingly popular. A recent study from Innova Market Insights found snacking is now an all-day practice for Americans, and salty snacks are especially popular both between meals and as a meal replacement. Snacking is now preferred to eating meals for 59% of adults across the globe, according to a study from Mondelez and the Harris Poll. Even during the pandemic, consumers have stocked up on snacks. Utz seems to hope this acquisition will help it continue to generate positive buzz on Wall Street about its business.
Utz, a nearly century-old company, had its fair share of experience with acquisitions in the salty snack space before it went public. Last year, Utz closed a merger with Kitchen Cooked, a maker of snack foods including potato chips, Kettle Kurls, Kettle Pops, popcorn and pretzels. It also closed a deal to buy Conagra Brands' direct-store delivery snacks business. Three years ago, Utz bought Inventure Foods — which owns TGI Friday's products, Tato Skins and Nathan's Famous licensed brands — for $165 million.
Given Utz's track record for M&A and its desire for continued growth in snacking, this likely won't be the last acquisition from the newly public company.
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September 29, 2020 at 10:35PM
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Utz buys filled pretzel brand H.K. Anderson from Conagra - Food Dive
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