The Hershey Co. (NYSE: HSY) announced it has entered into an agreement to acquire KRAVE Pure Foods Inc., manufacturer of KRAVE jerky, a leading all-natural snack brand of premium jerky products. The transaction will allow Hershey to tap into the rapidly growing meat snacks category and further expand into the broader snacks space.
“KRAVE jerky is a great fit to our portfolio and overall snacks and adjacencies strategy,” said Michele G. Buck, president, North America, The Hershey Co. “The KRAVE brand delivers on portable and protein nutrition while also understanding consumers’ food preferences, including the desire for simple ingredients and transparency, something that is also a part of Hershey’s strategic vision. We are excited to add KRAVE jerky’s unique, chef-inspired products and be a part of this transformational category.”
KRAVE jerky offers consumers a nutritious and premium option when looking for delicious high-protein snacks. Founded in 2009 by Jonathan Sebastiani, who had a passion and desire to develop a sustaining snack to satisfy his hunger, the company is now a leader in premium jerky, the fastest-growing sub-segment of the estimated $2.5 billion U.S. meat snacks category. KRAVE jerky has catapulted into the category with its reverence to quality, all-natural ingredients and unique flavor approach, including Black Cherry Barbeque Pork Jerky, Basil Citrus Turkey Jerky and Chili Lime Beef Jerky. KRAVE jerky products are also free of gluten and high fructose corn syrup and have no added nitrites or MSG.
“An important focus of KRAVE jerky’s business strategy is to push the boundaries within our category and to stay on top of ever-changing consumer needs. Joining the Hershey family will extend our resources for innovation and expand KRAVE jerky’s presence in the larger healthy snacking category,” said Jonathan Sebastiani, KRAVE CEO and founder. “Our partnership with Hershey is a testament to our team’s dedication to creating something unexpected and striving to be a cut above the rest. We are confident in our future and look forward to further success with Hershey.”
The overall meat snacks category is growing at a double-digit pace with a compounded annual growth rate of about 10 percent from 2010 to 2014. The better-for-you, premium subset of the category, where KRAVE participates, increased at a rate of almost four times greater than mainstream brands.
Hershey intends to leverage its best-in-class supply chain capabilities, consumer insights and retail relationships to accelerate growth and access to KRAVE products. Hershey will also partner with KRAVE’s talented team to continue to drive excitement and awareness of KRAVE jerky. KRAVE will remain headquartered in Sonoma, Calif., and Hershey plans to operate KRAVE as a standalone business within its Hershey North America division. Sebastiani will continue to lead the business as president of KRAVE and will report to Buck. KRAVE Pure Foods, Inc., has generated approximately $35 million in net sales over the last twelve months and was named to Forbes 2015 America’s Most Promising Companies list.
In 2012, KRAVE received a minority investment from Alliance Consumer Growth. Financial terms of the transaction were not disclosed. KRAVE was advised by Deutsche Bank. Hershey will fund the acquisition through cash and available credit facilities. The closing of the transaction is subject to regulatory approvals and customary closing conditions.