Synder’s-Lance will kick-start a restructuring plan to improve margins and drive focus on its branded products following the completion of its private brands divestment to Shearer’s Foods.
The snack giant sold off its private brands business along with two manufacturing plants in the US and Canada in a $430m deal, initially announced on May 7, 2014. At the same time, the company also purchased Wisconsin-based Baptista’s Bakery – a co-manufacturing specialist that already made some Snyder’s-Lance products including its fast-growing Snack Factory Pretzel Crisps brand.
Snyder’s-Lance said its margin improvement and restructuring program should offset costs created by the sale of its private brands – totting up annual cost reductions of between $22-25m.
It was estimated the total impact of its private business sell-off and Baptista’s buy would cause an annualized reduction in net revenue of around $250m.
“The plan is designed to scale the company’s operations appropriately with focus on branded products as well as the DSD and direct sales networks… Savings are expected to come from a combination of operational initiatives and headcount reductions,” the company said.
“…This is a major initiative for the company to ensure its cost base is managed aggressively.”
Snyder’s-Lance would announce more details in its Q2 2014 earnings call in August, it said.