CHARLOTTE, N.C. — Integration of Diamond Foods, Inc. is under way at Snyder’s-Lance, Inc., which finalized its acquisition of the snack manufacturer on Feb. 29. Snyder’s-Lance expects to deliver $75 million in annual cost synergies with the acquisition, $10 million of which will be reinvested in brand building activities.
|Carl E. Lee Jr., president and c.e.o. of Snyder’s-Lance|
“Based on our successful track record of integrating businesses, we are confident in our ability to deliver our synergy goals with Diamond Foods,” said Carl E. Lee Jr., president and chief executive officer of Snyder’s-Lance, during a May 10 conference call with financial analysts. “The initial synergies have already begun and will build over the next 24 months. We expect to realize savings in the selling and administration, shipping and distribution, and manufacturing and procurement.”
Snyder’s-Lance also expects to achieve significant revenue synergies, given its broader distribution footprint and complementary channel strengths.
“We expect our revenue synergies to be in four areas,” Mr. Lee said. “First, geographically, we are expanding core brands to new markets. Also by channels, leveraging our new portfolio to expand our distribution with key retailers; as well as categories, using the new product pipeline of both companies to further expand distribution. And finally, e-commerce, where we extend our scale and presence in this growing channel.”
Snyder’s-Lance also shared plans for driving growth across the brands it acquired with the Diamond Foods transaction, including Kettle Brand, Emerald, Pop Secret and Diamond of California.
“Turning to the brands, we clearly continue to see strength in the Kettle franchise in general,” Mr. Lee said. “The positioning there as a natural, better-for-you chip really does work real well… So we are bullish on Kettle. We just want to be very cautious and very careful as we go forward, and make sure that we support that brand in a profitable way, and support the category while we are at it.
“Pop Secret — there’s no surprise the overall category there is under some pressure. We’ve got some good plans with Disney that the Diamond team put in place last fall that we are leveraging, and looking forward to that. We’re also beginning, with the Diamond team and marketing team that came over, who bring some great expertise with them, looking at how maybe we combine their expertise and their knowledge with our renovation process to continue to help the overall category in microwave popcorn, and certainly continue to grab some share there with that brand. The brand has performed well historically. It just needs a little time and attention now.
“And then Emerald — personally, I’m very excited about Emerald. The innovation and the quality of that brand is just exceptional. The innovation team at Diamond did a phenomenal job, as our team does with Snyder’s and Cape and all of our other brands, really bringing some news to that category.“What we’ve got to do now is just focus on our distribution and our retail execution and continue to get more placements for Diamond and for Emerald.”