Snyder’s-Lance: New R&D center to support aggressive category-expanding innovation
The US snack firm discussed growth plans for the year in its 2012 fourth quarter (Q4) and full year earnings analyst call on Tuesday.
Carl Lee, president and chief operating officer (COO), said that the firm’s new R&D center in Hanover, Pennsylvania would open within a month.
“It’s due to open in the next 30 days and will support our aggressive innovation plans; helping us deliver category-expanding new products to deliver profitable, incremental growth for our retailers,” Lee said.
“We already have some exciting innovative new products that were developed for 2013,” he added.
The president and COO (soon to be CEO when David Singer retires in May) said that new packaging and flavors had been developed.
Snyder’s-Lance will launch a new version of its Lance Sandwich Crackers – Xtra Fulls – to mark the 100th anniversary of the brand. New flavors of its Nekot Cookie brand will also be launched.
Snack Factory set to boost 2013 growth
Snyder’s-Lance acquired pretzel specialist Snack Factory in October 2012 for $340m. Integration was finalized at the end of 2012 as planned and expenses associated totaled $1.2m.
“Pretzel Crisps brings a lot of growth potential to Snyder’s-Lance. Pretzel Crisps will help us push up our operating margins," Lee said.
The recently acquired brand is now Snyder’s fourth core brand along with Snyder’s Pretzels, Lance Sandwich Crackers and Cape Cod Kettle Chips.
The president and COO also noted that the direct distribution model that Snack Factory has with deli sections in supermarkets gives Snyder’s-Lance access to new store spaces.
2012: ‘Important and successful’
David Singer, CEO of Snyder’s-Lance said 2012 had been an “important and successful year”.
Singer said the year had seen many business achievements, including the completion of its merger integration and transition of its Direct Store Delivery (DSD) network to an independent business owner (IBO Model).
The company also rolled a strategic plan to focus on overall quality and growth of its core brands to target new consumers, he said, along with numerous marketing campaigns, infrastructure investment, margin improvement strategies and more distribution acquisitions to fill in its DSD network.
Total sales for 2012 decreased by 1% from to $1.62bn – a drop that Snyder’s said reflected the IBO route system conversion impact.
With the IBO conversion excluded, sales were up 2.2% from last year, Singer said.
Net profit including special items for Q4 took a considerable hit - down to $7.81m from $22.61m for Q4 2011.
Special items for the year included severance costs and professional fees related to merger and integration activities, asset impairment charges, consolidation costs and costs related to the acquisition of Snack Factory, the company said.
The company estimates that full net revenue for 2013 will be up 10-12% compared to 2012.