Smucker’s + Hostess = Supply Chain Synergy

Art of Supply

In early September, J.M. Smucker announced that they had struck a deal to acquire Hostess, the 130 year old maker of treats like Twinkies, Ho-Hos, Ding Dongs, Zingers, and Voortman cookies.

Smucker agreed to pay $5.6 Billion including $900 Million in debt for the company. Most people felt the deal was overpriced, and Smucker’s stock fell 7 percent, but the two executive teams had done their homework, and they are convinced that the potential synergies between the two organizations are well worth it.

Smucker’s has mastered the grocery retail space while Hostess is a convenience store superstar, and both companies have invested in data and supply chain transformation.

In this week’s episode of Dial P for Procurement, Kelly Barner demonstrates why synergy may be a source of value for Smucker’s and Hostess, and not just a consulting buzzword:

• The complementary nature of their product distribution channels and where they meet consumers - grocery stores v. convenience stores
• What Hostess can teach Smucker’s about product shelf life, and how that can save money in distribution
• Why Smucker’s slow but steady growth rate may provide the stability that the Hostess team needs

Links:

• Kelly Barner on LinkedIn
• Dial P for Procurement on AOP
• Subscribe to This Week in Procurement