Salty snacks maker Utz Brands has added to its direct-store delivery capabilities with the acquisition of Insignia International’s DSD network in California.
Pennsylvania-headquartered Utz made the announcement alongside its third-quarter results in which the Boulder Canyon brand owner tweaked its organic sales guidance higher but kept the outlook for other metrics unchanged.
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Utz said the DSD deal includes routes across California and the Midwest, along with unidentified “select related assets”. Financial terms were not disclosed.
CEO Howard Friedman said today (30 October): “With California representing the nation’s largest salty snack market at $4.1bn, we see substantial white space for our brands.
“As part of an expanded California strategy we have acquired select distribution assets in the state to provide us with the infrastructure and capabilities to accelerate our market penetration.”
Just Food has asked Insignia International, formerly Flagship Food Group, for comment on the DSD transaction with Utz.
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By GlobalDataUtz, which also produces its namesake snacks line as well as the On The Border, Chips & Dips, and Zapp’s brands, said California currently generates around $79m in retail sales for the business.
The DSD acquisition builds on another struck last year with National Food Corp., a deal that added around 65 routes across South Florida to its distribution network. It also bought 21 routes in central Florida from the same company in 2021.
Utz said today that both its reported and organic sales grew 3.4% in the third quarter to 28 September, delivering $377.8m in revenue. Volume/mix was up 4.5% with pricing a negative 1.1%.
The company’s branded salty snacks segment, its largest revenue earner, posted organic sales growth of 5.8%. However, its non-branded and non-salty snacks registered a 13.1% decline.
Utz raised its full-year organic sales growth guidance to 3% from 2.5%, which it said would be led by branded salty snacks.
CFO Bill Kelley said the adjusted outlook reflects “stronger revenue trends through the third quarter and our confidence in the remainder of the year”.
Elsewhere in today’s results, net income for the quarter deteriorated to a $20.2m loss, compared to a $0.8m profit a year earlier. Adjusted net income rose 13.2% to $33.5m.
EBITDA fell 22% to $23.8m but was up 11.7% at $60.3m on an adjusted basis.
Diluted earnings per share came in at a $0.17 loss. Adjusted EPS climbed 9.5% to $0.23.
Utz continues to expect adjusted EBITDA growth for the year of 7-10% and for adjusted EPS to rise by the same percentage magnitude.
