Snyder’s Lance looking to jettison non-core brands
- Snyder’s-Lance said it may divest some of its non-core brands, according to Food Business News.The company said it will undergo a broad review of its 2,000 SKUs.
- Brian J. Driscoll, interim chief executive officer at Snyder’s-Lance, said the review is part of a ”comprehensive and aggressive performance improvement plan” that comes as first-quarter results fell “significantly behind our expectations.”
- Driscoll said products with low volumes are negatively hurting the productivity of its manufacturing and supply chain. An overhaul of its brand lineup represents “a meaningful opportunity for improvement in efficiency with minimal top-line sales impact.”
Looking at Snyder’s-Lance portfolio, approximately 50% of the snack company’s 2,000 SKUs contribute only about 5% of total branded gross sales. That number is highly disproportional and some analysts wonder why it’s taken so long for the company to do anything about it.
Brian J. Driscoll, Snyder’s-Lance’s interim chief executive officer, said on a recent earnings call the low-performing SKUs bring in sales of nearly $90,000 each, whereas the higher performing SKU items deliver close to $2.3 million each.
Not only does that affect manufacturing and supply chain productivity, but it impacts sales and all aspects of the company. The belief is by re-examining the strategy and eliminating some underperforming products, sales can go up, and it might become a more attractive acquisition target.
The company’s large roster of snacking brands includes Pop Secret popcorn, Jay’s chips, Emerald nuts and Archway cookies. As more America’s turn to snacking, company’s like Snyder’s-Lance have the well-established products that fit in perfectly with this growing trend.
Last summer, executives at leadership Snyder’s-Lance were adamant the company was not for sale. A lot has changed since then, and it wouldn’t be surprising to see the proposed changes rekindle takeover talk once again.