Food industry giants are spending billions of dollars to try and cash in on a millennial diet trend (CPB, HSY)

On Monday, Campbell and Hershey both announced billion-dollar acquisitions of snack makers.
Millennials are driving major growth in snacks
Hershey and Campbell are looking to snacks to help drive growth as their iconic products fall out of favor.

Two titans of the food industry just made major investments in snacks.

On Monday, Campbell Soup Company announced it would buy snack maker Snyder's-Lance in a $4.87 billion all-cash deal.

The same day, Hershey announced it would buy another snack maker, Skinny Pop popcorn and Tyrrell's potato chips' parent company Amplify Snack Brands, for $1.6 billion.

The two deals reveal the changing nature of the American diet, as snacking is on the rise and traditional staples — including candy and canned soup — struggle to keep up.

The rise of the snack isn't particularly new, though it has been spectacular. In 2014, 64% of consumers surveyed by Mintel said they often snack between meals. In 2015, 94% told Mintel that they snack at least once a day, a figure that has held steady since.

The trend is especially strong with millennials and younger Americans. A quarter of American millennials, age 23 to 40, say that they snack four or more times a day, compared to just 10% of Gen X and 9% of Baby Boomers.

"The importance of snacking in America is undeniable and it is creating more and more opportunity for companies and brands as snacking frequency increases, particularly among younger consumers," Beth Bloom, Mintel's associate director of US food and drink reports, said earlier this year.

It makes sense that Campbell would look to Snyder's-Lance to cash in on this trend. In August, the iconic soup company announced that it anticipated sales to continue falling over the next year, as people move away from canned soups in favor of fresher products.

Hershey's has also been investing in snacks as American grow increasingly health conscious, diminishing the demand for sweets. The company has already launched snacky versions of several of the companies iconic candy brands, including Hershey's and Reese's Popped Snack Mix and Chocolate Dipped Pretzels, as well as more health-conscious snacks.

"We understand that consumers' relationship with food is changing," Marcel Nahm, vice president of Hershey's snack division, told Business Insider in 2016. "Consumers are more than ever interested in knowing what they put into their body, where does it come from, how does it get there ... Consumers want more and more choices."

Food industry giants are spending billions of dollars to try and cash in on a millennial diet trend (CPB, HSY)

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