PB&J icon Smucker buys Hostess for $5.6B as the snackification of America intensifies

Tuesday, September 12, 2023 by Snacks
Uncrustables’ new sibling (Justin Sullivan/Getty Images)

Uncrustables’ new sibling (Justin Sullivan/Getty Images)

’90s-lunchbox nostalgia… Yesterday, Jif-peanut-butter maker and Uncrustables legend J.M. Smucker said it would buy ~100-year-old Twinkie parent Hostess for $5.6B. Hostess is famous for wrapped snack cakes like Donettes and Ding Dongs. While its profits have jumped thanks to price hikes, sales volumes have slipped and it’s carrying $900M in debt. 

  • Zinger: Smucker’s cash-and-stock deal is a 54% premium over Hostess’ stock price last month (when it was first reportedly looking to sell).

  • Sugar high: Hostess shares surged 19% on the news, while Smucker fell 7%. It’s not the only Big Foodie trying to grow its pantry portfolio.

Snack-quisitions on the rise… Nearly half of US consumers eat three or more snacks a day. This year, snack sales are projected to grow up to 9.5%, versus 5.5% for the food-and-drink industry. While food giants have made more $$ by hiking prices, consumers are cutting back on extras. Now big brands are consolidating pantry faves to stay ahead.

  • Big food, small brands: Oreo maker Mondelez bought Clif Bar last year for $2.9B, and Tate’s cookies back in 2018. Ice-cream titan Unilever recently snapped up frozen-yogurt brand Yasso

  • New shelf: Cereal staple Kellogg is spinning out its snack brands (like Cheez-Its and Pringles) into a separate publicly traded company called Kellanova.


Classics can get in on new hits… Legacy brands like Smucker and Hostess are household names, but they need to innovate to stay relevant. Smucker has found success in fresh twists on classics, like new varieties of Uncrustables — which it soon expects will become a $1B/year brand. Smucker can use Hostess’ portfolio to feed America’s snack appetite with fresh creations. PB&J Twinkies, anyone?

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