PepsiCo, Inc. (PEP), J&J Snack Foods Corp. (JJSF): The Ultimate Brand Portfolio

Flawed strategies?

You may recognize Snyder’s-Lance Inc (NASDAQ:LNCE)  famous sandwich crackers and its Cape Cod potato chip brand.

Snyder’s-Lance Inc (NASDAQ:LNCE) is in the process of abandoning some of its brands, which may not represent a good idea for a snack foods company that wants to grow. In its most recent quarter, it suffered an impairment charge of $1.9 million in connection to one of its trademarks .

Another weakness stems from private label brands. Year to date, private brands comprised 16% of the company’s overall revenue. Price increases in this segment led to a 74 basis point drop in revenue.

However, operating margins improved 139 basis points due to efficiency gains from its Snack Factory acquisition. Snyder’s-Lance’s revenue grew 8% year to date .

Snyder’s-Lance new product releases planned for 2013 include variations on its sandwich crackers, cookies, and wafers. Moreover, its acquisition of Snack Factory should provide additional market opportunities .

New products and acquisitions should provide consumer engagement and serve as catalysts for future top and bottom line growth. However, its trademark writedowns represent an issue worth watching.

Conclusion

On the whole, PepsiCo, Inc. (NYSE:PEP) represents the best bet here due its ubiquity and strong portfolio of brands. J&J Snack Foods will continue to capitalize on strong pretzel demand and brand recognition stemming from well-known names such as Icee and Luigi. Snyder’s-Lance harbors some issues such as its writedown of trademarks, indicating that it may be giving up on valuable brands. However, product innovation and acquisition of Snack Factory may prove its saving grace.

The article Are These 3 Snack Companies Worthy Investments? originally appeared on Fool.com and is written by William Bias.

William Bias has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 

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