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Mondelez Concludes Buyout of Majority Stake in Perfect Snacks

Zacks Equity Research

Mondelez International, Inc. MDLZ has completed the acquisition of majority stake in Perfect Snacks. This deal, which was initially announced on Jun 19, highlights the company’s focus on bolstering offerings, especially in the fast-growing snacking food products arena. 

Perfect Snacks, a pioneer in the fast-growing refrigerated nutrition bars space, offers original refrigerated protein bar, and organic, non-GMO, nut-butter-based protein bars and bites. The addition of Perfect Snacks’ products are likely to strengthen Mondelez’s portfolio, which already includes brands like Oreo, Cadbury, Milka and belVita, and Tate’s. 

Hereafter, the company will operate Perfect Snacks as a separate business. It will also provide the required support to Perfect Snacks for broadening customer base and distributing products across the United States. 

This buyout is expected to strengthen Mondelez’s presence in the U.S. refrigerated snacks space that accounts for nearly one third of the total U.S. snacking market and delivers revenues of about $20 billion annually. Also, well-being snacks, which include nutrition bars, packs with nuts and fruits, yogurts, and hummus, account for $7 billion of total revenues of the snacks market.

In order to bolster presence in the snacks arena, Mondelez previously invested in Hu Master Holdings, a renowned company offering high-quality snacking items, in April 2019. With this collaboration, the company intends to make wellness-oriented snacks. In fact, Hu Master — the parent company of Hu Kitchen and Hu Products — boasts a portfolio of premium bands that focus on healthy and vegan/paleo-friendly snacking options.

This apart, Mondelez acquired premium cookie brand, Tate’s Bake Shop, for $500 million in June 2018. Additionally, in January 2018, the company teamed up with Post Consumer Brands, a business unit of Post Holdings, to create two new cookie-inspired breakfast cereals. Going ahead, Mondelez plans to offer more good-for-you snacks and expects 50% of its product portfolio to comprise “well-being” items by 2020. 

Apart from acquisitions, the company also focuses on innovations under the SnackFutures platform to augment its portfolio. It has also been increasing investments toward in-store executions and advertising to support the growth of Power Brands. In terms of profitability, the company is resorting to strategic pricing initiatives and productivity savings. 

Backed by such well-chalked moves, this Zacks Rank #2 (Buy) stock has gained 26.3% in the past six months, outperforming the industry’s growth of 6%.

 

Looking for More Consumer Staples Stocks? Check These

Campbell Soup Company CPB has a long-term earnings growth rate of 5% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

General Mills GIS, with a Zacks Rank #2, has a long-term earnings per share growth rate of 7%.

J. M. Smucker Company SJM, also with a Zacks Rank #2, has a long-term earnings per share growth rate of 4%.

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