Smuckers Building Snack-Food Empire With Hostess Deal

(Photo by m01229 under CC BY-SA 2.0)
(Photo by m01229 under CC BY-SA 2.0)

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Smuckers has a new jam: Twinkies.

The jelly-making giant J.M. Smuckers agreed on Monday to acquire Twinkie-maker Hostess for $5.6 billion. Now that’s quite the indulgence.

Hostess with the Mostess

Smuckers does more than just jar fruits and high-fructose corn syrup. It’s also been a major player in the pet food industry after acquiring Meow Mix and Milk-Bone maker Big Heart Pet Brands for $3.2 billion in 2015.

Now, the brand wants to expand into yet another grocery-store aisle — one, that’s increasingly lucrative thanks to the unshakable pandemic-era sweet tooth:

  • In the past three years, indulgent snacks — such as Hostess’ Twinkies, Ho Hos, and Ding Dongs — have experienced 20% higher sales growth than those marketed as healthier alternatives, at least according to one metric cited by The Wall Street Journal.
  • Meanwhile, Smuckers says that roughly 70% of customers are eating at least two snacks a day. Essentially, Smuckers wants in on munchy time that doesn’t include peanut butter or jelly.

Sugar Rush: Smuckers says it expects its soon-to-be cream-filled underling to contribute about $1.5 billion in annual sales, an uptick from the $1.3 billion that Hostess recorded in 2022. But that figure was up from the $1.1 billion in sales Hostess made in 2021, a bump attributed in large part to inflated prices. In fact, inflation has hit pantry-staple items like peanut butter and snacks more than just about any other grocery store goods. If the dentist can’t convince consumers to kick their sweet tooth, maybe their accountants can.