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Mondelez (MDLZ) to Boost Snacks Unit, Invests in Hu Master

Zacks Equity Research

Mondelez International, Inc. MDLZ has announced minority investments in Hu Master Holdings — a renowned company offering high quality snacking items. The initiative marks another stride taken by the company to bolster the snacking business.

Efforts to Boost Snacks Portfolio

Mondelez has been striving to expand in the snacking category for long. In fact, the company’s SnackFutures innovation hub is aimed toward exploring growth prospects in snacking, an area which is growing rapidly on a global basis. By collaborating with Hu Master Holdings, Mondelez expects 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 focuses on healthy and vegan/paleo-friendly snacking options. Mondelez plans to further expand Hu Master’s capabilities across different categories.

Markedly, the investment marks the company’s second venture under the SnackFutures platform. Prior to this, Mondelez made minor investments in Uplift Food — a start-up engaged in developing prebiotic functional foods.

Apart from launching new products and engaging in strategic partnerships, the SnackFutures initiative aims to support marketing, sourcing and distribution. Also, the program is directed toward enhancing digital capabilities.

We expect Mondelez’s efforts to expand snacking portfolio to boost performance in the forthcoming periods. Moreover, the company plans to augment good-for-you snacks and expects 50% of its product portfolio to comprise ‘well-being’ items by 2020.

Other Notable Efforts

In the past, Mondelez has entered into alliances with Keurig Dr Pepper business and Post Consumer Brands. Apart from these, acquisitions have been aiding portfolio growth as well. The buyout of Tate’s Bake Shop is quite noteworthy. Tate’s is one of the fastest growing biscuit brands in the United States and complements Mondelez’s portfolio. The buyout has been driving revenues for a while.

Additionally, the company is extending brands to newer geographies and platforms. It is increasing investment toward in-store execution and advertising to support Power Brands. Meanwhile, Mondelez is undertaking initiatives to enhance productivity savings that are fueling margins, cash flow and returns on invested capital.


 

Such well-chalked measures to boost revenues and profitability are raising investors’ optimism in the Zacks Rank #3 (Hold) stock. The company’s shares gained 15.8% in the past three months compared with the industry’s rise of 4.3%.

Don’t Miss These Solid Food Stocks

MEDIFAST MED, with long-term earnings growth rate of 20%, sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

General Mills GIS, sporting a Zacks Rank #1, has long-term earnings per share (EPS) growth rate of 7.5%.

Lamb Weston Holdings LW, with long-term EPS growth rate of 12.4%, carries a Zacks Rank #2 (BUY).

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