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Dive Briefing:
- Mondelēz International is buying a “significant stake” in Evirth, a leading Chinese cake and pastry maker, the snack giant said in a statement. The ownership stake and financial terms were not disclosed.
- The Oreo and Ritz maker said the deal represented a “significant step” to accelerate growth in its cakes and pastries segment, a key focus for the company alongside chocolate and biscuits.
- Mondelēz already has a minority stake in Evirth, which develops, manufactures and distributes frozen and refrigerated cakes and pastries under its brands, including Oreo and Philadelphia.
Dive Insight:
While Mondelez has established a market leadership position in some snack categories, the packaged foods giant has been open about its desire to gain a deeper presence in others.
“Cakes and pastries is a category where our brand can exist,” Martin Renaud, Mondelēz’s executive vice president and chief marketing and sales officer, told Food Dive last year. “We can build a very strong leadership position quickly.” He noted that the category lacks “a very large, strong player.”
The company’s growth in the cakes and pastries segment has been primarily through acquisitions.
In 2020, it acquired Give & Go, a U.S. company that makes brownies, cupcakes and other items. A year later, it added Chipita, which sells croissants and baked goods in Central and Eastern Europe. It also competes in this space with established brands like Oreo (Cakesters soft snack cakes) and Cadbury (Chocobakes – chocolate-filled cookies and layered cakes).
Cakes and pastries offer another way for Mondelēz to leverage the valuable assets it has built with its many snack brands, including Oreo and Cadbury, to drive sales and strengthen its position in other usage situations. For example, cakes and pastries bring the brand deeper into situations such as birthdays.
We will further expand this through the Evirth stake. The frozen-chilled cake and pastry market in China is currently estimated at $3 billion, with a compound annual growth rate of about 15%, percent. Mondelēz pointed out that China has a population of over 1.4 billion. Mondelēz There is an opportunity for long-term growth
Chicago-based snack manufacturer Since Dirk van der Put took over as CEO in late 2017, the company has made several acquisitions globally to fill gaps in its portfolio.
In the US, it acquired Tate’s Bake Shop and Perfect Snacks. Cliff Bar. Van de Put told analysts in February. Mondelez At the beginning of each year, we look at 35 to 40 potential M&A targets. Most of them do not result in a deal.
