Time for a snack? M&A in snack food category heats up.

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Each week we share insights from experienced operators and investors in consumer and retail. This article comes to us from consumer products investor extraordinaire, Dan Gross. Dan Gross is a VP at Encore Consumer Capital.

The snack market is alive and kicking. Last week, General Mills announced it was acquiring Food Should Taste Good, a natural tortilla chip company with unique flavors like olive, jalapeno and chocolate, that was founded only six years ago (Food Should Taste Good acquisition announcement). This week, emerging natural foods company, Mrs. May’s, was picked up by Dole at a very early stage, (Mrs. May’s acquisition announcement), with reported revenue of only $16M in 2011.

While these two successful exits are notable, they are not alone. Over the last few years, household brands like Kettle Chips, Stacy’s Pita Chips, Pretzel Crisps, Pirate’s Booty and PopChips have all received investments or changed owners. Because salty snacks tend to have a very quick repurchase cycles (according to Mintel, the average healthy snacker consumes a snack six times per week), many of these brands grew from inception to scale in just a few years.

Yet, the snack food marketplace is crowded. In 2010, there were almost 1,000 new salty/savory snack product introductions, representing nearly 20% of all food product introductions in the year. So, when you evaluate whether crowdfunding an early stage salty snack company makes sense, what should you look for to find the next salty snack success? Here are some thoughts:

Guest Author Dan Gross is a Vice President at Encore Consumer Capital, a consumer products private equity firm. You can reach Dan at daniel.w.gross@gmail.com.