Kettle versus Tyrrells: the new battle ground is the world

US companies Hershey and Campbell are buying into the crisps market – should investors crunch into some shares?

Article updated: 20 December 2017 10:00am Author: Michael Baxter

Famous pundit Jim Cramer wrote about the recent takeover of Snyder-Lance by Campbell and the possible takeover of Amplify Snack Brands by Hershey this week, and he failed to mention the key point.

He failed to grasp the very point that the investment community overlooks too often. You don’t need access to reams of research, or be an expert at interpreting balance sheets, or even be a highly qualified fund manager, oh no, to get the potential in these products, you have to be a hopeless addict like me.

Kettle and Tyrrells crisps are my vice. Back in the days when I used to jump in the car and drive around looking for a shop that sold Kettle crisps, I thought I was the only person who had this vice. But then, Trevor Brooking, the former football player showed me that in fact a big global market was opening up. I was watching Champions League football on TV, in the background I could hear the cry of “Ooh Aah Cantona” and Brooking was commenting on the match. He said something about the viewers at home, tucked into their bowl of Kettle Crisps. “Are you talking about me?” I wondered.

Many years later, Kettle crisps were on offer: buy one packet and get another for a penny. The shopkeeper couldn’t’ get his head around me turning the deal down – “no just the one packet,” I said. “Bbbut, but you can have two for an extra penny”he exclaimed. He didn’t understand. I only wanted one packet, and if I had bought two, well, I would have eaten the second packet too.

For me, one of the big disappointments in life is when the last crisp is gone.

I am not sure when I finally admitted that I actually preferred Tyrrells, but I can say it was tough times. Being asked to choose between Kettle and Tyrrells was like being asked to choose between two of your children. But when faced with that dilemma, Sophie did make her choice, and so did I. Now, when I see both packets on the shelf, I choose Kettle crisps if they are a lot cheaper, but Tyrrells if they are at a similar price.

Hindsight

And I kicked myself this morning. Amplify Snack Brands bought Tyrrells from a private equity outfit back in the summer of 2016. And now Hershey, the company behind Reese’s Peanut Butter Cups – a brand I had never heard of until this morning – may be buying Amplify. At least Hershey and Amplify have agreed terms and at a share price of £8.98, a 71 per cent premium on the price before the bid. “So, why, why didn’t I wax lyrical in this column about Amplify at the time of the deal.” That is why I kicked myself – and I can tell you, it hurt, too.

But then my research revealed a puzzle. In fact, the Amplify share price was higher before it bought Tyrrells.

So, what can we read into this one? Personally, I think that sometimes it just takes time for potential to be realised. Tyrrells distribution and indeed its popcorn products, all saw fantastic success under its private equity owners, and such success would have continued. For me the biggest puzzle relates to why Amplify is selling at a price that is less than its 18-month high, when there is so much potential in Tyrrells. Or maybe Amplify was just too small to do a product like Tyrrells justice.

Campbell and Kettles

Meanwhile, Campbell Soup has revealed plans to buy Snyder-Lance, the company which owns Kettle Foods.

It seems crisps are moving into a bigger league.

Don’t get it

I am not sure the markets have got these deals. The US media focus on the fact that Amplify makes SkinnyPop popcorn. Crisps – or chips as they are called stateside – are not as big as they are in the UK.

But, as my expanding waistline can testify, both Kettle foods and Tyrrells are superb products.

And I think the global potential is much, much greater than has been realised up to now – this is especially the case with Tyrrells, which has not got the global distribution that Kettle has.

But I do take one overriding lesson from all of this. Quality will out. Next time I discover a product that is as moreish as I found Kettle crisps back before it was a well-known brand, I am going to seek out shares in the company.


These views are those of the author alone and do not necessarily reflect the view of The Share Centre, its officers and employees.

Michael Baxter portrait photo
Michael Baxter

Economics Commentator

Michael is an economics, investment and technology writer, known for his entertaining style. He has previously been a full-time investor, founder of a technology company which was floated on the NASDAQ, and a director of a PR company specialising in IT.

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