Smuckers continues to ‘sharpen focus’ with the divestiture of Sahale Snacks

By Gill Hyslop

- Last updated on GMT

Sahale Snacks produces better-for-you snacks and treats at the premium end of the category. Pic: Sahale Snacks
Sahale Snacks produces better-for-you snacks and treats at the premium end of the category. Pic: Sahale Snacks

Related tags JM Smucker Hostess brands Sahale Snacks Second Nature Brands better for you Sweet baked goods diversification sales and acquisitions Post holdings

Hot on the heels of the announcement that it is acquiring Hostess Brands, the JM Smucker Company said it is divesting the Seattle-based nut and trail mix producer under a focused ‘portfolio and resource optimisation’ plan to support continued growth.

Smuckers - a manufacturer founded in 1897 to commercialise apple butter - has been much in the news of late after setting in motion an aggressive sales and acquisition strategy.

Most recently, the Ohio-headquartered corporation has reached a deal to sell Sahale Snacks to Second Nature Brands for approximately $34m. Smuckers acquired Sahale Snacks in 2014, which at the time, was pulling in around $50m. Revenue has slightly dropped over the past decade, with current sales of the nut-based and chocolate snacks clocking in at $48m.

The deal comes just two weeks after Smuckers announced plans to buy the Twinkies manufacturer for $5.6bn “to accelerate our focus on delighting consumers with convenient solutions across different meal and snacking occasions,”​ said president and CEO Mark Smucker.

The rationale also targets Smucker’s bottom line, expected to be accretive to adjusted earnings per share in the first fiscal year.

The deal includes all trademarks and Sahale’s leased manufacturing facility in Seattle, Washington. The company’s 100-strong workforce will also transition to Second Nature.

“The divestiture of the Sahale Snacks brand will support continued growth in our Consumer Foods business with enhanced investment in our Smucker’s Uncrustables brand and building on our leadership in spreads,”​ said Mark Smucker.

Detroit-headquartered Second Nature Brands is a manufacturer of premium better-for-you portfolio​ - including Kar’s, Second Nature Sanders and Brownie Brittle - sold both locally and internationally.

“Sahale Snacks adds a fantastic super-premium product to our range; considerably broadens our snack mix and nut portfolio; and unlocks significant new opportunities for us to help grow the category, which we are very excited about,” ​said Victor Mehren, Second Nature’s CEO.

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Pic: GettyImages

Of the Hostess acquisition, Smucker said, “we are adding an iconic sweet snacking platform; enhancing our ability to deliver brands consumers love and convenient solutions they desire; and leveraging the attributes Hostess Brands offers, including its strong convenience store distribution and leading innovation pipeline, combined with our strong commercial organisation and consistent retail execution across channels to drive continued growth.

“Our organisation is well positioned to deliver on the great potential our expanded family of brands offers, as has been reflected by our history of growth through acquisition and the successful integration of new categories to our business.

Added Andy Callahan, president and CEO of Hostess Brands, “I am extremely proud of the entire Hostess Brands team for the legacy they created in building a premier snacking company and driving industry leading returns for our investors.

“[This deal] represents another exciting chapter for Hostess Brands as we combine our iconic snacking brands with The J.M. Smucker Co’s family of beloved brands.

“We believe this is the right partnership to accelerate growth and create meaningful value for consumers, customers and shareholders. Our companies share highly complementary go-to market strategies, and we are very similar in our core business principles and operations.

“Above all else, Hostess Brands and JM Smucker share a deep commitment to inspiring moments of joy and satisfaction through our products.”

Added Smucker, “We look forward to this exciting new chapter for The J.M. Smucker Co.”

That new chapter also includes the divestiture of portions of its pet food business to Post Holdings for $1.2bn.

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