Big brands don't become household names by making small moves. Instead, it takes calculated, strategic plays to grow them into the companies that consumers recognize. The Hershey Company understands this well as it announced it has entered into a definitive agreement to acquire Dot's Pretzels and Pretzels, Inc.
"As the fastest-growing United States pretzel brand, Dot's Pretzels would further accelerate our success in the permissible salty snack category, along with our successful SkinnyPop and Pirate's Booty brands," said Michele Buck, The Hershey Company President and Chief Executive Officer. "With a unique range of bold, distinctive seasonings and a flavorful crunch that creates a premium pretzel experience for consumers, Dot's Pretzels stand apart from all other products in the pretzel category and represents 55 percent of the pretzel category's growth during the past year."
The total purchase price for these two proposed acquisitions is approximately $1.2 billion, according to a press release. With Dot's Pretzels rapid growth, it will be the perfect complement to Hershey's salty snacking portfolio, advancing the company's snacking powerhouse vision for the future.
Dot's Pretzels was created over a decade ago in North Dakota by Founder Dot Henke in her home kitchen. Since then, the brand's product line has expanded, drawing in a crowd of pretzel-loving consumers to boost the company's growth.
"I created my pretzels to share with those people closest to me and have built the business with the idea of sharing them with everyone," said Henke. "With Hershey behind this amazing brand, I am confident that anyone who would like to enjoy these deliciously bold pretzels will have the opportunity."
Hershey will also be entering into an agreement to acquire Pretzels, Inc. from an affiliate of Peak Rock Capital, a private investment firm. The pretzel company is a co-manufacturer for Dot's Pretzels and several other customers and is an innovator in the category.
Based in Bluffton, Indiana, Pretzels, Inc. operate three manufacturing locations in Indiana and Kansas. When the deal is completed, all three locations, in addition to four pretzel-seasoning facilities, will be acquired with Dot's. The acquisition of Pretzels, Inc. will give Hershey deep pretzel category and product expertise as well as the manufacturing capabilities to support Dot's growth and future innovation. It will also lead to continued growth throughout the entire pretzel category through Pretzels, Inc.'s co-manufacturing capabilities.
"Pretzels, Inc. will help us expand Hershey's snacking and production capabilities while keeping the special connection to Dot's," added Buck. "It will be important as we continue to grow this already fast-growing brand and create new products in the broader pretzel category."
The estimated aggregate net sales for the two businesses were approximately $275 million for the 12 months ended September 2021, showing that this deal could be a lucrative one for Hershey. Customary regulatory approvals are expected to close by the end of 2021, finalizing the acquisition.
What will be Hershey's next play to expand its snacking sector reach? Only time and Deli Market News will tell, so stick with us.