Brief - The Hustle

Hershey makes a $420m Booty call

Written by Conor Grant | Jun 30, 2020 10:08:42 AM

Hershey has purchased Pirate Brands, the geniuses behind Pirate’s Booty and Smart Puffs, for $420m. The cheese-puff prodigy is the latest of several healthy snack brands to fall under the spell of Hershey’s kiss.

Power to the puffs

As it turns out, you’re not the only one out there with a secret love for orange finger dust: The annual market for cheese puffs is $2.5B

Pirate’s Booty is the hottest brand in the category, with an 8% annual growth rate. Food conglomerate B&G Foods bought Pirate Brands for $195m in 2013, and in the past 5 years, the value of the puff producers more than doubled.

Now, Hershey hopes that having the Pirates onboard will help the chocolate company add to its treasure chest. Financial analysts say the acquisition should bring the Kiss-crafters closer to their financial targets.

There’s some healthy competition in the snacking industry

The trend away from meals and towards snacks has intersected with the health-food craze — making healthy snacks the holy grail for food companies.

In May, PepsiCo bought Bare Foods, the makers of fruit and vegetable chips. General Mills bought organic snackmaker Annies for $820m in 2014, and most other big food companies have either acquired or launched health food brands in the last few years.

Hershey’s cheesy choice is the latest in a series of several healthy snack acquisitions designed to keep Hershey competitive with other diversified food companies.

On a snack-quisition spree

Last year, Hershey purchased Amplify Snack brands — the makers of SkinnyPop and Paqui tortilla chips — for $921m. Before that, the chocolate-maker spent millions buying the snacking-chocolate company barkTHINS and the jerky company Krave. 

Hershey now refers to the foods in its salty-sweet lineup as “snack-fections” — positioning the company as more than a mere candymaker to compete with larger, more varied businesses.

With chocolate, jerky, and cheese puffs under one roof, Hershey hopes it has enough Booty for everyone — including the health nuts — to snack on.