Monday morning was a big moment for deals in the food industry. Campbell Soup Company cblrf announced that it would acquire Snyder’s-Lance for nearly $5 billion, and the Hershey Company hsy said it is buying Amplify Snack Brands in a deal valued at about $1.6 billion.
At the heart of both of those acquisitions? Snacks. And lots of them. Snyder’s-Lance is home to a who’s who of snack brands, including Snyder’s of Hanover, Lance, Kettle, Cape Cod, Pop Secret, and Late July. Amplify, meanwhile, is the company behind the likes of Skinny Pop, Tyrrells, Oatmega, and Paqui.
Big Food companies like Campbell and Hershey are on the hunt for snacking brands, because—to put it simply—the U.S. is a nation obsessed with snacking. More than 90% of Americans snack every day. In fact, U.S. consumers are so committed to their snacking habit that many skip regular meals in lieu of these smaller bites throughout the day.
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That’s made snacks one of the few bright spots in a consumer packaged foods industry struggling to respond to shoppers’ shifting tastes. The growth of the $89 billion snacking market has outpaced the essentially non-existent growth of the rest of the packaged food industry. Snyder’s-Lance, for example, had a compound annual growth rate of 11.5% between 2012 and 2016.
That gain clearly has not been lost on Big Food. The deal is part of Hershey’s “journey to becoming an innovative snacking powerhouse,” said president and CEO Michele Buck in a press release. “We’ve been on a journey to expand in faster growing space,” Campbell president and CEO Denise Morrison told Fortune.
Both companies touted that the acquisitions built up their portfolios in “better-for-you” snacks, a response to shoppers who have been seeking less-processed fare and labels stacked with ingredients they understand.
For Hershey, the deal further pushes the iconic confectionary company to look beyond chocolate. It’s a tenet of Buck’s strategy that pre-dates her elevation to the CEO role in March; she spearheaded the company’s acquisition of Krave jerky in 2015.
The Campbell deal, meanwhile, is the largest in the company’s history; in the last five years it has made six acquisitions, including Bolthouse, Plum, and Kelsen.
“It’s a transformational move that will shift our center of gravity,” Morrison told Fortune.
The Snyder’s-Lance deal creates a $5 billion snacking business within Campbell, which would make up nearly half of the company’s net sales. The softer soup business would fall to about a quarter of the business. Bernstein analyst Alexia Howard wrote in a note that “this deal appears to be the latest attempt by Campbell to bring back growth, having experienced several tough quarters with declining sales in soup.”
With its $2.2 billion in sales over the last 12 months, the addition of Snyder’s-Lance would push Campbell’s revenue to more than $10 billion.
Morrison said the deal came together very quickly and that it had not been determined yet how Snyder’s-Lance and its management team would integrated into Campbell. “The ink is just drying,” she said.