What Happened to Diamond Foods? The Rise, Fall, and Rebirth of a Snack Giant

The Early Success Story: How Diamond Foods Built Its Empire

Diamond Foods began its journey in the early 20th century as a small California-based nut grower association. Founded in 1912, it started as a cooperative of walnut farmers who banded together to process, market, and distribute their harvests under a unified brand. Over the decades, the company evolved from a modest agricultural collective into a powerhouse in the snack food and culinary nut industry.

By the 1980s and 1990s, Diamond Foods had secured its place in American pantries with its premium roasted nuts, nut oils, and plant-based snacks. The brand gained recognition for high-quality walnuts, almonds, and pecans, often featuring eye-catching blue packaging with the iconic blue diamond logo. These products were staples in health-conscious kitchens and gourmet food stores alike.

Expansion into Mainstream Snack Markets

In the 2000s, Diamond Foods made a pivotal strategic shift. It expanded beyond its base in culinary nuts and began entering the high-growth snack aisle, positioning itself to rival food giants like Frito-Lay, Kraft, and PepsiCo’s snack divisions. The company acquired several snack brands, most notably:

• Sensible Portions: Known for veggie-based snacks like Veggie Straws and Garden Salsa.
• Pop Secret: A major microwave popcorn brand competing with Orville Redenbacher and Act II.

These acquisitions diversified Diamond Foods’ reach beyond whole nuts and allowed it to capture market share among consumers looking for convenient, flavorful, and sometimes health-oriented snacks. At its peak, the company claimed over $1 billion in annual revenues, and its stock was valued on the NASDAQ under the ticker DMND.

Innovation and Marketing Success

Diamond Foods invested heavily in innovation and branding. The company leveraged lifestyle marketing, especially promoting walnuts as a superfood with brain-boosting and heart-healthy benefits. Nutritional science campaigns featured endorsements from dietitians and health experts, aligning with growing consumer interest in functional foods.

The “Take Care of Your Brain” campaign, for example, became a hallmark of their walnut division, contributing significantly to sales growth. Similarly, Sensible Portions successfully tapped into the trend of “better-for-you” snacks by marketing products as made from real vegetables and lower in fat than traditional chips.

During this period, the company appeared poised for long-term success, with rising profits, expanding product lines, and increasing consumer awareness.

The Accounting Scandal: The Collapse of Trust

Despite its outward success, Diamond Foods was rocked by one of the most shocking accounting scandals in the snack food industry during the early 2010s. The crisis began to unfold in late 2012 when the company issued a public warning to investors.

What Went Wrong? The Walnut Accountant Scheme

An internal investigation revealed that Diamond Foods had inflated its earnings by approximately $27 million over two fiscal years by manipulating payments to walnut growers. The core of the scandal involved improperly recording grower payments.

Typically, walnut growers are paid months after harvest. Diamond Foods used this lag to its advantage by delaying payments to growers and classifying them as expenses for future periods. This effectively shifted costs to the next fiscal year, artificially boosting profits in the current period and allowing the company to consistently exceed Wall Street earnings expectations.

This practice, referred to internally as “grower payments accrual management,” was not disclosed to auditors or investors and violated generally accepted accounting principles (GAAP). Executives, including CEO Mike Mendes and CFO Brian Driscoll, were implicated in the cover-up. An SEC investigation followed, leading to:

• Fines totaling tens of millions of dollars.
• The forced resignation of key executives.
• An overhaul of the board and financial oversight structure.

Consequences: Stock Plummet and Investor Backlash

The fallout was swift and severe. The company’s stock, which had traded around $42 per share in 2011, plummeted to less than $15 within months of the scandal’s exposure. Investor confidence evaporated, lawsuits were filed, and the company faced delisting threats from NASDAQ.

Analysts who once hailed Diamond Foods as a rising star now questioned its integrity. “It’s not the size of the fraud, but the culture behind it,” said one financial commentator. “When a company fakes results to hit targets, it’s a breakdown in leadership.”

By 2013, Diamond Foods had been suspended from major financial indices and began trading over-the-counter, a symbol of its degraded status.

Reorganization and Brand Shifts

In the aftermath of the scandal, Diamond Foods underwent a major transformation. With depleted cash reserves and tarnished reputation, the company needed to reset its business strategy.

Leadership Changes and Restructuring

New CEO Brian J. Driscoll (a different executive from the former CFO) took over in 2012 to lead the recovery. He initiated:

• A complete financial restatement for fiscal years 2010 and 2011.
• Implementation of stricter internal controls and compliance procedures.
• Cost-cutting measures, including headcount reductions and production consolidations.

The company also focused on repairing its brand image, investing in transparency campaigns and hiring independent auditors to restore credibility.

Sale of Underperforming Assets

One of the most significant shifts in the recovery plan was the decision to divest non-core brands. In 2014, Diamond Foods sold the Pop Secret brand to Hershey’s for $265 million, marking a strategic pivot away from microwave popcorn. Later, Sensible Portions was sold to E.I. du Pont de Nemours and Company (now part of IFF—International Flavors & Fragrances) in 2016.

These moves allowed Diamond Foods to focus solely on its original strength: premium nuts and specialty ingredients. The company rebranded its focus and positioned itself as a leader in plant-based nutrition and clean-label products.

Renewed Focus on Culinary Nuts and Health

Post-scandal, Diamond Foods doubled down on its walnut and almond heritage. The brand:

• Launched organic and non-GMO certified product lines.
• Expanded into ready-to-eat snack packs tailored for on-the-go consumers.
• Partnered with fitness influencers, nutritionists, and dietitians to rebuild trust in its health claims.

The company also invested in sustainability initiatives, promoting responsible farming and water conservation in California almond operations—critical given the state’s frequent droughts.

Acquisition by Snyder’s-Lance: A New Chapter Begins

Despite its recovery efforts, Diamond Foods was still a shadow of its former self. The company had lost critical mass in the competitive snack landscape and struggled to regrow revenues to pre-scandal levels.

The Snyder’s-Lance Takeover

In December 2016, Diamond Foods was acquired by Snyder’s-Lance, Inc.—a major snack food conglomerate known for brands like Snyder’s of Hanover pretzels, Lance crackers, and Cape Cod potato chips. The acquisition price was $473 million in cash and stock, valuing Diamond at a fraction of its peak market worth.

This merger was part of a broader trend in the food industry—consolidation—as smaller or mid-tier brands sought strength through integration with larger portfolios.

Why Snyder’s-Lance Acquired Diamond Foods

Several strategic reasons drove the acquisition:

Integration and Brand Evolution

While Diamond Foods ceased to operate as an independent entity, the brand lived on. Snyder’s-Lance incorporated Diamond’s products into its broader portfolio, maintaining the Diamond name on packaging and marketing. The Diamond of California line—especially roasted and salted nuts—remained widely available in grocery stores across the U.S.

Distribution improved under the larger parent company’s national network, allowing Diamond to regain shelf space and retailer confidence. Co-branded promotions with Lance Crackers and Snyder’s Pretzels helped introduce Diamond nuts to new audiences.

The Bigger Picture: Lessons from the Diamond Foods Saga

The rise and fall of Diamond Foods offers critical lessons for businesses, investors, and consumers alike. It exemplifies how fast-growth ambition can sometimes mask deeper structural weaknesses.

Accounting Integrity is Non-Negotiable

The most glaring lesson lies in financial governance. The manipulation of grower payments wasn’t a one-time error—it reflected systemic lapses in oversight. Boards and auditors must remain vigilant, especially in seasonal agricultural businesses where cash flow timing can be exploited.

The scandal also highlighted how short-term financial targets can create perverse incentives. Executives under pressure to beat earnings forecasts may engage in practices that, while not immediately illegal, undermine long-term viability and public trust.

Brand Trust is Fragile

For decades, Diamond Foods built a reputation for quality, transparency, and health. In just months, that image was compromised. Even after corrective actions, consumer sentiment recovery took years. Rebuilding trust required not just audits and policy changes, but real engagement with nutrition communities and transparency in sourcing.

The Shift in Consumer Preferences

During its recovery, Diamond adapted to new consumer trends: gluten-free, plant-based, keto-friendly, and clean-label demands. While the accounting scandal weakened the company, its ability to maintain relevance in the snack space hinged on product innovation and alignment with evolving health trends.

This shift continues under Snyder’s-Lance’s ownership. Today, Diamond-branded nuts are marketed as “protein-packed,” “antioxidant-rich,” and ideal for plant-forward lifestyles—appealing to millennials and Gen Z consumers more than ever.

Where Is Diamond Now? The Legacy Continues

As of 2024, the Diamond brand is alive and well, carried forward under the umbrella of Campbell Soup Company, which purchased Snyder’s-Lance in 2018 for $6.1 billion.

Becoming Part of a Food Industry Powerhouse

The Campbell acquisition brought Diamond into one of America’s most established food portfolios. Though Campbell is best known for soups, its expansion into snacks through the Snyder’s-Lance deal signaled a strategic commitment to growth in the packaged snack and on-the-go food sectors.

Diamond nuts are now part of Campbell Snacks, a division that includes iconic names like Kettle Brand, Late July, and Emerald Nuts. This integration allows for shared R&D, ingredient sourcing, and marketing efficiency.

Current Market Position

Today, Diamond:

• Offers a wide range of nuts, trail mixes, and baking chips in grocery retailers nationwide.
• Emphasizes sustainability, with initiatives like water efficiency in almond farming and recyclable packaging.
• Markets products as part of healthy lifestyle regimens—including plant-based diets, heart health, and cognitive well-being.

While no longer a standalone public company, Diamond remains a trusted brand in American households. Its products are frequently recommended by nutritionists and featured in fitness and wellness publications.

Innovation in the Modern Era

Recent product developments include:

• Roasted & Salted Nut Varieties with Sea Salt and Light Roast Options

These appeal to flavor seekers looking for reduced sodium or gentler roasting methods.

• Plant-Based Protein Mixes

Combining nuts, seeds, and dried fruit to meet growing demand for high-protein snacks.

• Limited-Edition Flavors and Seasonal Packs

Examples include honey roasted pecans for holidays or spicy chili-lime almonds for summer.

The Broader Implications for the Food Industry

The Diamond Foods story is not just about one company—it reflects larger shifts in the American food ecosystem.

The Rise of Snackification

Consumers are increasingly opting for snacks over traditional meals. This trend, known as **“snackification,”** explains why companies like Diamond, Snyder’s, and Campbell are investing aggressively in convenient, flavorful, and functional snack products.

Diamond’s pivot—from gourmet culinary ingredient to ready-to-eat snack packs—mirrors this industry-wide evolution.

Accountability in Agri-Business

The accounting scandal also highlighted challenges in **agricultural supply chain finance**. Many farming cooperatives and food processors rely on complex payment timelines and accruals. The Diamond case reinforced the need for clearer reporting standards and greater transparency between agribusinesses and their suppliers.

Ownership Consolidation: The New Normal

The acquisition path of Diamond Foods—from independent firm, to Snyder’s-Lance, to Campbell—illustrates **how consolidation has reshaped the food industry**. Smaller brands often find long-term success not through independence, but through integration into larger portfolios with enhanced distribution and R&D capabilities.

This doesn’t spell doom for innovation. In fact, brands like Diamond retain their identity while gaining leverage from parent companies’ scale.

Final Thoughts: A Cautionary Tale with a Hopeful Ending

The story of Diamond Foods is a compelling narrative of ambition, hubris, redemption, and transformation. From its roots as a walnut growers’ co-op, to a billion-dollar snack innovator, to a company beset by scandal—then reborn through acquisition—Diamond exemplifies the volatility and resilience of modern consumer brands.

Its legacy lives on, not because it avoided failure, but because it demonstrated the ability to **adapt, learn, and rebuild**. For food entrepreneurs and investors, the key takeaway is clear: **Sustainable growth demands integrity, transparency, and a long-term vision**.

While the name “Diamond Foods” may no longer be visible on stock tickers, the diamond logo still shines on grocery shelves—a reminder that even after setbacks, strong brands can endure, evolve, and find new purpose in a changing world.

What was Diamond Foods and what products did it originally sell?

Diamond Foods began in 1912 as a California-based agricultural cooperative formed by walnut growers. Initially focused on cultivating and processing walnuts, the company aimed to market its members’ harvests directly to consumers, bypassing middlemen. Over the decades, it evolved into a commercially branded entity, expanding its reach into grocery stores and establishing itself as a key player in the premium nut market. The company’s reputation was built on quality, transparency, and a deep connection to its farming roots.

As consumer demand for snacks grew, Diamond Foods capitalized on the trend by introducing branded snack products that leveraged its nut expertise. Its portfolio expanded to include popular lines like Emerald nuts and packaged snack mixes. Though rooted in walnuts, the company increasingly diversified into other nuts and healthy snack options, positioning itself as a provider of nutritious, on-the-go food. This focus on health-conscious consumers helped Diamond grow into a nationally recognized brand before a series of corporate missteps threatened its stability.

How did Diamond Foods experience rapid growth in the 2000s?

Diamond Foods’ growth in the 2000s was driven by aggressive acquisition strategies and strategic marketing. The company acquired popular snack brands, most notably the Kettle Brand potato chips in 2008, which broadened its product offerings beyond nuts into the competitive potato chip market. These acquisitions allowed Diamond to tap into new consumer segments and increase its shelf presence in supermarkets across the United States. By rebranding and leveraging distribution networks, the company managed to boost revenue significantly during this period.

Additionally, Diamond Foods invested in advertising and positioned its products as premium, natural, and health-oriented, appealing to the rising trend of clean-label eating. This resonated with consumers increasingly concerned about ingredients and nutrition. The company also expanded internationally and partnered with major retailers to promote its snacks. As a result, its stock price soared, and Diamond appeared poised for long-term success, even being considered a rising star in the packaged food industry.

What accounting scandal led to the downfall of Diamond Foods?

In 2012, Diamond Foods became embroiled in a major accounting scandal that revealed the company had inflated its earnings over several fiscal quarters. Executives manipulated payments to walnut growers by delaying payments from one fiscal year to the next, effectively shifting expenses to future periods to make current profits appear higher. This practice, meant to meet Wall Street expectations and trigger executive bonuses, distorted financial statements and misled investors and regulators.

The scandal resulted in the resignation of the CEO and CFO, a Securities and Exchange Commission (SEC) investigation, shareholder lawsuits, and a significant drop in the company’s stock value. Auditors withdrew prior financial reports, and Diamond Foods was forced to restate years of earnings. The damage to its reputation was severe, eroding trust among investors, retailers, and consumers, and marking the beginning of its financial decline.

How did the scandal affect Diamond Foods’ acquisition of Pringles?

At the time of the scandal, Diamond Foods was in the final stages of attempting to acquire the Pringles snack brand from Procter & Gamble for $2.35 billion. The deal promised to transform Diamond into a true snack food powerhouse, placing it in direct competition with industry giants like Frito-Lay. However, the revelation of fraudulent accounting practices led to a loss of credibility and financial instability, prompting regulators and investors to scrutinize the acquisition more closely.

As confidence in Diamond’s finances waned, its ability to secure financing for the purchase weakened. In early 2012, the Pringles deal was ultimately terminated, and shortly thereafter, Diamond lost out to Kellogg Company, which acquired Pringles instead. This missed opportunity not only dashed Diamond’s ambitions for massive growth but also highlighted the devastating consequences of corporate mismanagement at a critical juncture in its history.

What happened to Diamond Foods after the scandal?

In the years following the accounting scandal, Diamond Foods struggled to regain its footing. Revenues declined, investment slowed, and the company faced ongoing legal and financial consequences. To stabilize operations, Diamond underwent leadership changes, implemented stricter internal controls, and focused on repairing its brand image. However, it remained vulnerable in a competitive marketplace and was unable to fully recover its prior momentum.

By 2016, facing continued challenges, Diamond Foods was acquired by Snyder’s-Lance, a larger snack food company. The acquisition allowed Diamond’s legacy brands—such as Emerald and Pop Secret—to continue under new ownership, but the standalone entity ceased to exist. The merger marked the end of Diamond Foods as an independent company and symbolized the cost of prioritizing short-term financial gains over long-term integrity.

Are Diamond Foods’ original brands still available today?

Yes, many of the core brands that were part of Diamond Foods remain available on store shelves today, although they are now owned and operated by larger corporations. Emerald, known for its nut products and trail mixes, continues to be marketed as a healthy snack option and is now part of the Snyder’s-Lance portfolio, which was later acquired by Campbell Soup Company in 2018. Pop Secret popcorn, another former Diamond Foods brand, is still widely distributed and enjoys a strong presence in the microwave popcorn category.

These brands have endured due to their established consumer recognition and product quality. Under new ownership, they’ve benefited from expanded distribution and marketing support, helping maintain their relevance. While the Diamond Foods name no longer operates independently, its product legacy lives on through continued innovation and branding efforts by the companies that absorbed it.

What lessons can businesses learn from the rise and fall of Diamond Foods?

The story of Diamond Foods serves as a cautionary tale about the dangers of prioritizing financial performance over ethical business practices. The pressure to meet earnings targets led to a culture where short-term results were valued more than transparency and accountability. This ultimately eroded stakeholder trust and derailed a promising growth trajectory. Companies must foster governance structures and internal controls that prevent such misconduct, especially during periods of rapid expansion.

Furthermore, the case underscores the importance of sustainability and integrity in brand building. While aggressive acquisitions and marketing can fuel growth, long-term success depends on reliable financial reporting and authentic consumer trust. Diamond Foods’ fall shows that even successful companies can collapse quickly when core values are compromised. Organizations should emphasize ethical leadership and ensure that incentives do not encourage risky or deceptive behavior.