Hershey has a sudden hankering for protein, with plans to add jerky to its lineup.
The maker of treats like Reese's, Kit Kat and Twizzlers says it's buying Krave Jerky for an undisclosed sum. Krave, based in Sonoma, Calif., positions itself as a premium jerky with no artificial ingredients and comes in flavours like black cherry barbecue, basil citrus and lemon garlic.
Krave products are sold in Canada. The brand was introduced here two years ago.
Michele Buck, president of Hershey North America, said in a phone interview that the company plans to expand its offerings across the "snacking continuum'' through acquisitions and in-house development.
While The Hershey Co. is already strong player in sweet treats, the Krave deal is intended to give it a foothold in snacks people see as healthy fuel.
The push to expand beyond impulsive sweets comes as Americans' addiction to snacking grows. Rather than sticking to three meals a day, people are increasingly grazing on smaller bites around the clock. The trend has prompted Dunkin' Donuts to position its fried-chicken sandwiches as snacks, and Taco Bell to introduce a ``Happier Hour'' for people looking for a late afternoon pick-me-up.
In the packaged food universe, the nation's snacking habit is blurring the lines between what qualifies as an indulgence versus nourishing fuel, prompting food makers to market snacks with nutritional benefits like fiber. Protein in particular has become a desirable ingredient, which in turn has helped boost jerky sales.
``We know consumers have an interest in portable and protein-based nutrition,'' Buck said.
Last year, meat stick and beef jerky sales in Canada across all channels totalled $156 million, according to Nielsen <52 weeks to Sept.20>. That was up 18 per cent in dollar volume and five per cent in unit volume.
In Canada, Krave works with food broker Marsham International to distribute its products.
In a note to investors, J.P. Morgan analyst Ken Goldman wrote that the Krave deal ``perhaps indicates that Hershey is less enamoured of candy's growth potential than it previously was.'' He noted that indulgent snacks like chocolates and cookies generally underperformed categories like trail mixes, nuts and meat snacks.
Jon Sebastiani, who founded Krave in 2009, sees even more growth potential for the jerky market by improving the category's image. As such, Krave notes that its products do not contain nitrates or artificial flavours, and that they're lower in salt and cholesterol than competing jerkies.
``It's very inviting to a female consumer,'' Sebastiani said.
Sebastiani, who will continue to lead the unit and report to Buck, said sales for Krave Jerky have been growing at triple digit rates. Last year, he said sales totalled $36 million. The company's offerings are expanding, too.
Capitalizing on the desire for protein, Sebastiani said Krave plans to launch a ``meat bar'' later this year to compete with granola bars found near supermarket checkout aisles.
As for any potential pairings between Krave and Hershey products, Buck said there are no plans but didn't rule out the possibility.
This was Hershey's second acquisition in as many months. In December it bought the Allan Candy Company. The famed Canadian confectionery maker, based in Ontario, is known for brands such as Allan and Big Foot. In 2011, Hershey acquired another Canadian company: B.C.'s Brookside chocolates.