Business Strategy and Outlook| Rebecca Scheuneman, CFA |
In the past five years, Hostess averaged 6% organic sales growth, materially outpacing the 2%-3% growth of the sweet treats categories per Euromonitor. Market share gains were driven by compelling innovations, as Hostess has developed an effective innovation process due to significant investments in talent and tools over the last few years. Hostess mines consumer data to better understand the factors that drive snacking occasions, analyzes where current offerings are not meeting consumer needs, and develops products that specifically target these needs. Hostess has identified five snacking occasions it will focus on that represent a collective market of $50 billion (in relation to the $15 billion market that it currently operates in), with each occasion growing at a mid-single-digit pace. These occasions are morning sweet start, lunchbox, afternoon reward, immediate consumption, and afternoon sharing.