The Hershey Company (NYSE: HSY) is making its largest play yet in the better-for-you snack market with a $750 million deal to acquire organic snack maker LesserEvil[7]. The transaction, announced April 3-4, 2025, accelerates Hershey’s strategic pivot toward health-conscious consumers while addressing critical manufacturing capacity needs.
Strategic Rationale: Beyond Chocolate
This acquisition continues Hershey’s multi-year diversification strategy:
- Portfolio expansion: Adds organic popcorn, Power Curls, and Paleo Puffs to Hershey’s $11.2 billion snack portfolio[1][3]
- Manufacturing boost: Gains production facilities to support 8.7% Q4 2024 sales growth[1]
- Consumer reach: Targets the $23 billion organic snack market growing at 12% annually[4][8]
Deal Mechanics
The transaction structure reveals Hershey’s long-term vision:
| Metric | LesserEvil (2023) | Projection (2024) |
|---|---|---|
| Gross Sales | $103M[3] | $165M[3] |
| EBITDA | $14.4M[3] | N/A |
Source: Company filings and CNBC disclosures[3]
Leadership & Integration Strategy
Hershey is adopting a nuanced integration approach:
- Operational autonomy: LesserEvil’s leadership team remains intact[2][6]
- Cross-pollination: Combines Hershey’s distribution with LesserEvil’s agile R&D[8]
- Cultural alignment: Emphasis on shared values around sustainability[6][8]
Industry Implications
The deal reflects broader CPG sector trends:
- Premiumization: Organic snacks command 35% price premiums vs conventional[4]
- Portfolio balancing: Follows PepsiCo’s $550M Beyond Meat partnership[7]
- Retailer demand: 68% of grocers prioritize cross-category snack suppliers[8]
Financial Footing
Hershey’s strong balance sheet supports aggressive M&A:
- $33.2B market cap with 47.4% gross margins[4]
- 55 consecutive years of dividend payments[4]
- Moderate debt levels per InvestingPro analysis[4]
“This isn’t just about snacks – it’s about future-proofing our business model,” said outgoing CEO Michele Buck. “LesserEvil gives us runway in categories growing 3x faster than confectionery.”[1][6]
The transaction, expected to close by Q4 2025 pending regulatory approval, positions Hershey to capture 15% of the better-for-you snack market by 2026 according to internal projections[8].
Sources
https://www.just-food.com/news/hershey-organic-snacks-lesserevil/, https://markets.businessinsider.com/news/stocks/hershey-announces-agreement-to-acquire-lesserevil-1034548587, http://www.foodprocessing.com/product-development/snack-foods/news/55279792/hershey-to-add-lesserevil-to-its-snacks-portfolio, https://www.investing.com/news/company-news/hershey-to-acquire-organic-snack-maker-lesserevil-93CH-3966121, https://www.nasdaq.com/articles/hershey-buy-lesserevil, https://readmagazine.com/industries/food-beverage/the-hershey-company-to-acquire-lesserevil-expanding-its-better-for-you-snacking-portfolio/, https://athletechnews.com/hershey-joins-better-for-you-frenzy-with-lesserevil-deal/, https://www.stocktitan.net/news/HSY/the-hershey-company-announces-intent-to-acquire-lesser-lch2uj30z6q6.html
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