Analysis - Hershey's Krave buy reflects hunger for healthier snacks

By Anjali Athavaley and Olivia Oran

NEW YORK (Reuters) - Hershey Co's (HSY.N) announcement on Thursday that it will buy jerky maker Krave Pure Foods Inc reflects a growing appetite for healthy snacks in the United States, even those that were once considered gas station staples.

Changes in Americans' eating habits are fuelling the trend. According to Nielsen data released earlier this month, 30 percent of U.S. consumers specifically look for food that is high in protein. That includes jerky: Sales of Slim Jim jerky were up 20 percent over the last 13 weeks, thanks to the success of bacon jerky products, according to ConAgra Foods Inc (CAG.N).

Companies and analysts say that more people are snacking instead of eating full meals. A Nielsen survey from last year found that 49 percent of North Americans say they replace breakfast with a snack.

The deal for Krave, which is lower-calorie than traditional meat jerky brands, comes at a time when packaged food companies are looking to expand into faster-growing categories that are perceived as healthier.

"What it shows is that the large food and beverage companies have a very difficult time of creating brands," Paddy Spence, chief executive of Zevia, the maker of a naturally sweetened soda, said in an interview. "In this case, Hershey felt that it was easier to buy rather than build."

Other potential brands that could be targets for larger packaged food companies include cold pressed juice company Suja Juice, gluten-free popcorn company PopCorners and healthy potato chip company Popchips, according to industry investors and bankers. All three companies, which did not respond to requests for comment on Thursday, are considered prospects because they are high-growth brands in the health and wellness space.

Other recent deals in the so-called better-for-you category have included JM Smucker Co's (SJM.N) acquisition of fruits and nuts manufacturer Sahale Snacks in August and TreeHouse Foods Inc's purchase of trail mix maker Flagstone Foods in June.

Companies are also launching items developed in-house. Last year, Kraft Foods Group Inc (KRFT.O) started selling an Oscar Mayer product called the P3 portable protein pack with Oscar Mayer meat, Kraft cheese and Planters nuts.

In Hershey's case, the chocolate maker had long said it would consider getting into other categories. Erin Lash, senior analyst at Morningstar, said the company's foray into meat is noteworthy. "I think it could signal that they may look at deals in a similar vein," she said in an interview.

(Editing by Matthew Lewis)