Hershey to acquire low-sugar brand Lily’s

HERSHEY, PA. — The Hershey Co. has entered into a definitive agreement to acquire Lily’s, a maker of low-sugar chocolate products. Financial terms of the transaction were not disclosed.

Based in Boulder, Colo., Lily’s markets an assortment of stevia-sweetened chocolate bars, baking chips and other confections such as peanut butter cups and coated nuts and popcorn. A broad offering of flavors spans dark, extra dark, milk and white chocolate style varieties. Products are available in more than 24,000 retail outlets nationwide.

The brand was founded by Cynthia Tice, previously a natural foods store owner who had sworn off sugar but couldn’t kick her daily chocolate cravings. A longtime user of stevia in home cooking and baking, she began experimenting with the sweetener to create a healthier take on her favorite indulgence. The initial products debuted nationally at Whole Foods Market in 2012.

“Cynthia had the vision that consumers wanted a better-for-you option in confections, and today 80% of adults want to cut back on their sugar intake,” said Jane Miller, chief executive officer of Lily’s. “By joining the Hershey’s family of brands, Lily’s will become a platform confection brand making BFY options easily accessible to all consumers.”

The addition to Hershey’s portfolio builds on the company’s multi-pronged approach to offer better-for-you snacks and confections. In February, the company shared plans to expand its portfolio to deliver more reduced-sugar, organic and plant-based alternatives. Additionally, Hershey partnered with ASR Group, a West Palm Beach, Fla.-based sweetener company, to co-lead an equity investment in Bonumose, Inc., a startup focused on plant-based ingredients, including rare and natural sugars. The investment, which is part of Hershey’s C7 Ventures, will fuel a research and development partnership aimed at advancing the tastes of Hershey’s zero- and reduced-sugar chocolate, along with its broader better-for-you snack offerings going forward.

“Hershey is focused on developing a BFY confection portfolio that offers a variety of choices to meet the evolving needs of our consumers,” said Chuck Raup, president US at Hershey. “Lily’s is a great strategic complement to our existing offerings in this growing segment of the confection category.”

The acquisition will be financed with cash on hand and short-term borrowings and is expected to be slightly accretive to Hershey’s earnings in the first full year following closing. The transaction is subject to customary regulatory approvals and is expected to close in the next few months.

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