Diamond Foods acquires Pop Secret, makes plans for marketing

SAN FRANCISCO Diamond Foods, marketer of Emerald brand snack nuts, is popping into the microwavable popcorn segment with its recent $190 million acquisition of Pop Secret, currently the No.2 microwavable popcorn brand.

Emerald brand snack nuts transformed the snack nut category in 2004 with resealable lids, different packaging, new flavors and heavy ad spending. Diamond Foods has the opportunity to do the same with Pop Secret. Diamond Foods chief executive Michael Mendes plans on catering the new advertising campaign to younger consumers through different flavors and packaging, and, according to Investor’s Business Daily, a series of national TV ads will be aired soon. The company intends to spend between $26 million and $29 million on advertising this year and expects to gain $85 million to $90 million in annual sales with the addition of Pop Secret.

“The microwave popcorn market has been pretty stagnant over the past few years, with little money spent on marketing,” analyst Mark Argento of Craig-Hallum Capital Group said. “There’s a big opportunity to re-grow the category with some marketing dollars and product improvement.”

Diamond Foods’ microwavable popcorn possesses high selling potential because of its location in the snack aisle, often adjacent to the snack nuts, and because retail buyers often have control over the purchasing of both snack nuts and popcorn. Both products also have a long shelf life and do not require refrigeration.