Pop Secret continued to struggle as the brand was impacted by competitor activity and category headwinds, said Snyder’s-Lance as it announced its second-quarter financial results this week.
Earlier this year , analysts Technavio said microwave popcorn was losing ground as consumers opted for the convenience of ready-to-eat products.
Snyder’s-Lance said the microwave category has lacked attention.
“The category can grow,” president and chief executive officer Carl E Lee, Jr told analysts. “The chance to have microwave popcorn at home – that occasion is still extremely important to consumers.”
Lee said volume sales in the microwave popcorn category had been “pretty consistent”, but the market had become focused on value rather than premium products.
“A couple of brands are leaning into price versus quality,” he added. “We are going to focus on quality and taste and leverage some of the weapons we have in our arsenal to continue to reinvigorate the category and excite people about our brand.”
The category needed support and attention, he said, pointing out that Snyder’s-Lance has previously reinvigorated brands including Cape Cod.
“We have a track record of successfully renovating brands,” added Lee. “We see this as another challenge, another opportunity.”
Partnership with retailers
Initial Pop Secret activity is already under way, and includes stepping up partnerships with retailers through consumer events.
A new marketing program for Pop Secret is being launched in the third quarter and will ramp up in the fourth quarter, said Snyder’s-Lance, which is also expanding its work with Disney. Recent Pop Secret products have featured a tie-up with Disney’s Star Wars franchise.
“Early retail response to our plans has been very positive,” said Lee. “We are already improving planograms.”
Snyder’s-Lance also has a presence in ready-to-eat popcorn through brands including Cape Cod and UK-based Metcalfe’s Skinny Limited. Diamond acquired a 26% stake in Metcalfe’s, owner of premium popcorn brand Metcalfe’s Skinny Popcorn, two months before Snyder’s-Lance completed its acquisition of the company.
“We will make sure we take advantage of the ready to eat opportunity that we know is there, and the microwave opportunity that we see is there,” said Lee.
Metcalfe’s Skinny gave the business the opportunity to grow in a new territory, according to Lee, adding that it was a “very exciting market”.
“We have just got to make sure we focus on popcorn in general - and we’ve got the advantage that we can focus on home consumption and on the go consumption,” said Lee.
Snyder’s-Lance said the wider integration of the Diamond business was on track, and that it had already gained benefits including consolidating shipments to warehouses to maximize freight efficiency, and was piloting production changes across to lower manufacturing costs.
Snyder’s-Lance president and chief executive officer Carl E Lee, Jr, on how key brands performed in the second quarter.
Snyder’s of Hanover: "The pretzel category has been facing headwinds and this has impacted performance, but renovation is delivering the early results we expected and we moved back to gaining market share in the second quarter. We saw sales increase across leading SKUs, and consumption trends have rebounded. We still have work ahead of us but early results are very encouraging."
Lance: "Continues to benefit from the renovation process started last year. We are seeing positive velocity and base business growth across all channels. Given the growth, we are bringing on additional manufacturing capacity at the end of the third quarter. Gluten free continues to outpace expectations in retail and online."
Cape Cod: Is outpacing the category two to one, reported Lee.
Kettle: "Remains healthy and brings a younger consumer focused on better for you attributes, which broadens our appeal across the chips category."
Emerald: Base business continues to grow, said Lee, driven by volume gains in small bags and distribution gains through 2016 innovation.