Hershey is buying North Dakota-based Dot's Pretzels, along with one of its manufacturing partners, for a combined $1.2 billion, the chocolate giant announced Wednesday.
"With a unique range of bold, distinctive seasonings and a flavorful crunch that creates a premium pretzel experience for consumers, Dot's Pretzels stand apart from all other products in the pretzel category," Hershey Co. president and chief executive Michele Buck said in a statement.
The company called Dot's the "fastest-growing U.S. pretzel brand" and said it represented a staggering 55% of the category's growth over the past year.
Dorothy "Dot" Henke founded the company in her home outside outside of Minot, N.D., in 2012. She found early success amid the state's oil boom and its hungry workers before getting picked up by an increasing number of retailers, including Minneapolis-based Target Corp. Henke said it's her secret seasoning recipe that led to her success.
"I created my pretzels to share with those people closest to me and have built the business with the idea of sharing them with everyone," she said in a news release Wednesday. "With Hershey behind this amazing brand, I am confident that anyone who would like to enjoy these deliciously bold pretzels will have the opportunity."
Consumption of savory snacks, like ready-to-eat popcorn, chips and flavored pretzels, has trended upward in recent years, but sales spiked during the pandemic as Americans spent more time in front of screens, according to a recent report from the NPD Group.
Hershey's $1.2 billion deal includes Pretzels Inc., a co-manufacturer for Dot's owned by Peak Rock Capital. The company has locations in Indiana and Kansas.
"Pretzels Inc. will help us expand Hershey's snacking and production capabilities while keeping the special connection to Dot's," Buck said.
Hershey said Dot's and Pretzels Inc. had combined sales of $275 million over the past year. The sale is expected to close by the end of the year.