Hershey is increasing its exposure to relatively healthier confectionery with the planned acquisition of Lily’s Sweets, a US peer known for its lower-sugar products.
The Reese’s brand owner has entered into an agreement to acquire Boulder, Colorado-based Lily’s for an undisclosed sum.
Lily’s low-sugar products include dark and milk chocolate-style bars, baking chips, peanut butter cups and other confectionery products that Hershey said fit its “multi-pronged better-for-you snacking strategy”.
It suggested Lily’s will add a “key better-for-you confection brand to Hershey’s portfolio of iconic chocolate and candy favourites”.
Chuck Raup, the president of Hershey’s US business, said: “Hershey is focused on developing a better-for-you confection portfolio that offers a variety of choices to meet the evolving needs of our consumers. Lily’s is a great strategic complement to our existing offerings in this growing segment of the confection category.”
Hershey pointed out that “better-for-you” snacking continues to grow faster than mainstream segments markets such as potato chips, ice cream and cookies but are still “under-developed” in confectionery. It suggested the Lily’s acquisition would enable it to accelerate this growth and “re-imagine the future of the candy aisle in partnership with retailers”.
Lily’s traces its roots to co-founder Cynthia Tice’s decision to raise awareness about better-for-you foods by opening Center Foods, a natural foods store, in Philadelphia in 1978.
In 2012, she launched four Lily’s chocolate-style bars nationally in Whole Foods Market and today the expanded line of bars, baking chips and other confectionery items is sold across the country through major retailers.
Jane Miller, CEO of Lily’s, said: “Cynthia had the vision that consumers wanted a better-for-you option in confections and today 80% of adults want to cut back on their sugar intake.
“By joining the Hershey’s family of brands, Lily’s will become a platform confection brand making BFY options easily accessible to all consumers.”
Last October, Hershey acquired a minority stake in fledgling US firm Quinn as part of a Series D funding round. Founded in 2010 by Kristy Lewis, Boulder, Colorado-based Quinn manufactures microwavable popcorn, pop-at-home kernels and gluten-free pretzels.
This February, Hershey joined US sugars supplier ASR Group to co-lead an investment in Bonumose, a start-up manufacturing lower-calorie sweeteners.
A year ago, Hershey sold the US jerky business Krave, which it acquired in 2015, to local group Sonoma Brands.