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Scale, resources from Snyder's-Lance, but not across-board domination

This year, Carl Lee Jr. became CEO of N.C.-based company formed in part by Snyder's of Hanover

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Carl Lee Jr. is CEO of Snyder's-Lance Inc.
Carl Lee Jr. is CEO of Snyder's-Lance Inc. - (Photo / Submitted)

Carl E. Lee Jr. came from the midstate side in the 2010 formation of Snyder's-Lance Inc. to become its president and chief operating officer.

This year, he took the helm of the North Carolina-based snack food company as CEO.

"Synergies" was an important word around the deal between York County-based Snyder's of Hanover and Charlotte-based Lance Inc., which formed the publicly traded snack food company, including as it pertains to delivering products to stores.

In addition to bringing together two firms' delivery systems, Snyder's-Lance has acquired businesses to help build in-house distribution operations that support independent business owners who operate delivery routes.

The firm undertook a conversion of company-owned routes to the IBO system, and the majority of its products reach outlets in this direct-store delivery network, according to a regulatory filing.

The firm this year also increased its marketing and advertising investments, which Lee said is a benefit of being a larger company.

However, don't look for Snyder's-Lance to charge into just any segment, he said.

Lee talked with the Business Journal this fall about the business and stressed the strategic nature of the categories the firm is in and also focused on the company's continued commitment to the communities where it operates, including Central Pennsylvania.

Q: Along the way, since the merger and then since you took over as chief executive, have there been any bumps in the road to note or any big successes, with emphasis on national distribution synergies and direct-store delivery?

A: Distribution is a key strategic part of our overall company model, and we have seen that for a long, long time. At Snyder's, we were building out a DSD distribution company nationwide, and city by city, market by market, we were able to move out of Central Pennsylvania across the entire United States to be able to provide national distribution for our brands.

While we were doing that to focus on supermarkets nationwide, and adding in the other channels like (convenience) stores and clubs and mom-and-pop stores, Lance was doing something similar, building out their direct-store delivery system focusing even more on (convenience) stores …

The chance to combine both of those gave us what I call railroad tracks to take new products into up-and-down-the-street channels, as we call them, which include (convenience) stores, but also to expand distribution pretty rapidly across the U.S. in supermarkets.

Have you in general seen the synergies you expected to see in 2010?

The answer is clearly yes. We did a lot of preplanning before we brought the companies together, and both companies had great experience with (merger and acquisition) activity prior. We really had the capability and the muscle, as I call it, to be able to pull off something of this magnitude. Bringing two companies our size together is no easy feat, but when you have the quality of team and leaders that we have, our team demonstrated that they were able to execute all the plans that we had prepared.

And we've been very successful delivering all of the synergies that we expected, and delivering them in most cases slightly ahead of schedule. We converted our DSD system in record time, and I'm not aware of anyone else who took on a project of that size and that scope with the time that we were able to achieve it in, so it's worked out well.

What are the returns that you've seen from your marketing and advertising push this year?

We're incredibly pleased with the national advertising we've had on the pretzel pieces, as an example, a very unique, high-value item that has delivered some great growth even prior to the advertising, and we've seen that accelerate with the advertising.

And we're doing that on not only our Snyder's. We've had a lot of grassroots marketing on our Lance sandwich crackers, and that's worked extremely well. And with our snacks patrol, we've been able to take our products out to our consumers wherever they're at. It may be a ballgame, it may be another sporting event, it may be some type of gathering where there are thousands or maybe even hundreds of thousands of people, and we're right there with our team.

We're looking for many different ways to get to our consumers, and doing a lot with digital, doing a lot with social (media), and that was one of the benefits of bringing these companies together. Because now we have the scale to spend more on advertising and marketing.

I have to highlight our new (research and development) center in Hanover. … We're very proud of that very significant investment, and the new positions it's added in Hanover, to be able to expand and be a company now with a first-rate R-and-D center that is fully staffed and fully up and running.

Where is the end game you see as Snyder's-Lance's place in the market, where there is Frito-Lay on one hand and regional players on the other? Is it taking a run at Frito-Lay to be the Chevy to the Ford there?

No, I would not characterize it as that. I would say it would be completely the opposite ... our goal is to be a premium, value-added snack supplier. We want to be premium, we want to be differentiated, and we really want to stand above the crowd in the categories where we choose to compete.

We're selective in where we compete. We're thrilled to be the No. 1 pretzel, not only nationwide but across the globe. There is a category that is very sizable, very large, but we leverage our scale, we leverage our capabilities, to be the leader inside of that particular segment of snacks. We do the same thing with sandwich crackers. We're clearly the leader with sandwich crackers, again a sizable category that we like to play in. Premium and niche is what we really like to focus on, and we like categories that size that we like playing (in).

Do we get up in the morning thinking we are competing with Frito? No. Do we think we are competing with some of the regional guys you talked about? No. We're clearly focused on being a stand-alone snack company that selectively chooses the right categories to compete in and categories that we're going to win in.

Brent Burkey

Brent Burkey

Brent Burkey covers York County, agribusiness, energy and environment, and workforce issues. Have a tip or question for him? Email him at brentb@cpbj.com. Follow him on Twitter, @brentburkey.

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