PB&J icon Smucker buys Hostess for $5.6B as the snackification of America intensifies

’90s-lunchbox nostalgia… Yesterday, Jif-peanut-butter maker and Uncrustables legend J.M. Smucker said it would buy ~100-year-old Twinkie parent Hostess for $5.6B. Hostess is famous for wrapped snack cakes like Donettes and Ding Dongs. While its profits have jumped thanks to price hikes, sales volumes have slipped and it’s carrying $900M in debt. 

• Zinger: Smucker’s cash-and-stock deal is a 54% premium over Hostess’ stock price last month (when it was first reportedly looking to sell).

• Sugar high: Hostess shares surged 19% on the news, while Smucker fell 7%. It’s not the only Big Foodie trying to grow its pantry portfolio.

Snack-quisitions on the rise… Nearly half of US consumers eat three or more snacks a day. This year, snack sales are projected to grow up to 9.5%, versus 5.5% for the food-and-drink industry. While food giants have made more $$ by hiking prices, consumers are cutting back on extras. Now big brands are consolidating pantry faves to stay ahead.

• Big food, small brands: Oreo maker Mondelez bought Clif Bar last year for $2.9B, and Tate’s cookies back in 2018. Ice-cream titan Unilever recently snapped up frozen-yogurt brand Yasso. 

• New shelf: Cereal staple Kellogg is spinning out its snack brands (like Cheez-Its and Pringles) into a separate publicly traded company called Kellanova.