The Supply Chain Matters blog highlights another move on the part of a global manufacturer to added increased control and agility in manufacturing sourcing while broadening the company’s market offerings.

 

Hershey Company’s recently announced a combined $1.2 billion acquisition to acquire Dot’s Pretzels, makers of Dot’s Homestyle Pretzels. The deal further includes Pretzel’s Inc., a U.S. based manufacturer for both Dot’s Pretzels along with other salty snacks-based customers.

According to industry and published media reports, the twofold deal is aimed to diversify Hershey’s product offerings beyond chocolate and assorted candies to now add a popular line of pretzel products. The deal further provides augmented manufacturing capability in U.S. based facilities in the presence of Pretzel, Inc. The company indicated that with this deal, Hershey will control seven production facilities for baking and seasoning of products in the United States.

Of late, the chocolate icon had been sourcing production in nearshore of offshore locations. The company’s existing line of pretzels are manufactured by select suppliers. According to Hershey’s CFO, this deal serves to both bring the company’s pretzel lines in-house and better align sourcing strategies.

 

Supply Chain Matters Perspectives

Supply Chain Matters is of the belief that this deal translates to revised thinking of supply chain control, including added options for U.S. production. With the ongoing rapid increases in raw material and transportation costs, sourcing strategy, and the distance needed to move snacking products to retail outlets is becoming a more important consideration in product margin goals. During the heights of the pandemic last year, demand for snacking or indulgence products remain elevated. But some manufacturers, including Hershey, were hampered in their abilities to deal with the constraints of restricted labor, raw materials, and transportation.

Supply Chain Matters has provided for readers other recent moves in augmenting added control.

A now evolving effort in U.S. auto manufacturers recently announced efforts to gain direct control of semiconductor device sourcing strategies. addressing more direct control of supply chain involves

Another was retailer American Eagle Outfitter’s deal to acquire third party logistics provider Quiet Logistics in an effort to garner added control of the customer fulfillment experience.

There will surely be more actions involving multiple industries in the coming months.

 

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