Hershey Bites Into Better-For-You Snacking With LesserEvil Deal: Details

The Hershey Company HSY is deepening its push into the savory snacking space with a new acquisition. The confectionery giant announced on Thursday it struck a definitive deal to acquire LesserEvil, a brand known for its organic and boldly flavored snacks.

This move reflects Hershey’s ongoing effort to expand its snacking portfolio from iconic sweets such as Reese’s and Jolly Ranchers and build momentum in the better-for-you snack sector.

The acquisition is valued around $750 million, according to a report from the Wall Street Journal. The report also mentioned that the total value of the deal could increase if LesserEvil meets specific performance targets.

LesserEvil’s leadership will remain intact following the acquisition and will continue overseeing its innovation pipeline and manufacturing capabilities.

“Investing in LesserEvil brings a multi-category, better-for-you snacks platform to extend our offerings into new categories and forms, reaching new consumers in more eating occasions,” said Hershey’s President and Chief Executive Officer, Michele Buck.

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“This high-growth brand not only complements our beloved confection and salty snack brands but also brings additional manufacturing capabilities and capacity to meet growing consumer and retailer needs.”

Hershey has made strategic bets on brands like SkinnyPop, Dot’s Homestyle Pretzels, and Pirate’s Booty.

Hershey indicated that the deal is expected to close later in 2024, pending regulatory approvals. The confectioner held $730.7 million in cash and equivalents as of December 31.

The company’s fourth-quarter sales of $2.89 billion increased 8.7% Y/Y, outpacing the analyst consensus estimate of $2.84 billion.

Hershey’s North America Confectionery segment net sales were $2.354.2 billion, up 6% while the Salty Snacks segment jumped 35.9% to $278.9 million.

The company had warned that a surge in cocoa prices is expected to put significant pressure on 2025 earnings.

Price Action: HSY shares closed higher by 1.76% at $166.83 on Thursday.

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