Welcome to SJGLE.com! |Register for free|log in
Welcome to SJGLE.com! |Register for free|log in
Related Searches: Tea Vitamin Nutrients Ingredients paper cup packing
In Dec 2022, the confectionary giant revealed plans to sell its gum business for $1.35bn (€1.28bn) to the Perfetti Van Melle Group, a European gum and confectionery maker that should close in Q4 of 2023.
© iStock/MarianVejcik
The deal effectively ends Mondelēz’s gum interests in the United States, Canada, and Europe but it maintains an interest in the emerging market gum business in Latin America and Asia, Middle East, and Africa.
“As we continue progressing our Vision 2030 focus and acceleration strategy, doubling down on our core snacking categories, we are pleased to transition our developed market gum business to a values-led, family-owned company whose portfolio is a strategic fit, and wher our brands and people can thrive,” said Mondelēz CEO Dirk Van de Put.
Mondelēz’s review of its gum interests back in May last year came as the segment struggled due to Covid-19, which restricted consumer time ‘on the go’ and hence gum consumption.
The whole gum category generated $2.88bn (€2.74bn) in the year ending June 14, 2020, according to data compiled by research firm IRI. This figure was down 8.2% from 12 months ago. Unit sales decreased 14.6% to 1.52bn (€1.44bn) over the same period.
In contrast, snacking continued on its upward trajectory as people adapted to new eating habits arising from home working environments.
As part of Mondelēz’s Vision 2030 strategy, the company has embarked on an acquisition spree, having bought US-based premium cookie and baked goods brand Tate’s Bake Shop in 2018.
It followed that up with the purchase of another US-based snack and chocolate maker Hu in 2021, whilst also establishing a majority stake in nut butter-based protein bars and bites Perfect Snacks.
Last year, Mondelēz added Clif Bar & Company to its portfolio after an initial $2.9bn (€2.8bn) offer was accepted that included the Clif, Luna and Clif Kid brands.
The investment outlay contrasts to the sale of Mondelēz’s gum business, which included the manufacturing facilities based in Rockford, IL and Skarbimierz, Poland.
Also acquired by the Perfetti Van Melle Group were the gum brands Trident, Dentyne, Stimorol, Hollywood, V6, Chiclets, Bubbaloo and Bubblicious in the US, Canada and Europe, as well as the European candy brands Cachou Lajaunie, Negro, and La Vosgienne.
The sale, according to Andrew Lazar, senior analyst for packaged food at Barclays, would free up cash to purchase other snacking brands, strengthening its presence in the segment while offloading an asset dented by the COVID-19 lockdown.
“From a strategic standpoint, we see this divestiture as growth-accretive while also enabling greater focus on growth and reinvestment in Mondelēz core chocolate, biscuit, and baked snacks categories,” he said.
“Sales for this asset were declining at an -11% CAGR between 2016-19 before falling at a much more significant rate during 2020 due to the impact of COVID-19.
“All said, sales for this business in 2021 were ~$450mm, though we believe they were likely $100mm or so higher prior to the pandemic.”
Lazar added that the move was another step towards the company’s longer-term goal of generating 90% of its revenue from its two core categories of chocolate and biscuits.
“Additionally, the company is still working through its planned divestiture of its global Halls business, which too should benefit Mondelēz for similar reasons.
“Notably, Mondelēz will continue to own and invest in its emerging market gum business as it provides scale and distribution access."
E-newsletter
Tags