BOCA RATON, FLA. — Mondelez International, Inc., Chicago, has made nine acquisitions since 2018. Five of the largest have been Tate’s Bake Shop, Give & Go, Chipita, Clif Bar & Co., and Ricolino. During a Feb. 21 presentation at the Consumer Analyst Group of New York conference in Boca Raton, Luca Zaramella, chief financial officer, explained the company’s strategic priorities for each business.
“Our framework around M&A is very straightforward,” he said. “We are targeting growth accretive assets that meet key consumer needs, and fill portfolio gaps, both from a category standpoint and geographically. Clearly, we favor chocolate and biscuits assets. But in emerging markets, we do not lose sight of the advantage, that scale and route to market can bring.”
Acquired in 2018, Tate’s Bake Shop provided Mondelez with an entry point into the premium cookie segment. Since the acquisition, Tate’s Bake Shop has more than doubled sales and doubled distribution, said Mr. Zaramella.
“Looking ahead, this brand has a lot of potential, including more distribution points, new products such as cookie bark and vegan, and growing the platform in baked snacks or ‘Chocobakery,’” he said.
Instore bakery supplier Give & Go was acquired in 2020. The company manufactures cakes and pastries and has averaged more than 20% sales growth over the past two years, surpassing $700 million.
“Mondelez has provided capital to increase capacity for leading innovation platforms, and the results are very strong, growing more than twice the rate of the market increasing household penetration by over 20% and successfully entering new adjacencies such as donuts and mini-snack cakes,” Mr. Zaramella said. “We have also leveraged our portfolio of iconic brands such as Oreo and Chips Ahoy! to drive incremental revenue and differentiation.”
Chipita, a global supplier of packaged cakes and pastries, generated sales of approximately $580 million when it was acquired in January 2022. The company’s products include croissants, bagel chips, cake bars, biscuits and spreads sold mostly under the 7Days, Chipicao and Fineti brands.
“Chipita is a high-growth cakes and pastry platform with nearly $700 million in revenue,” Mr. Zaramella said. “The 7Days brand has a leading market position in Europe with an attractive footprint skewed toward emerging markets. It also offers scale to leverage other Mondelez brands and expand distribution into new markets.
“We closed Chipita early last year and fully integrated it within six months, posting double-digit revenue growth in '22. This year, we expect to expand our geographic footprint and unlock cost synergies, including line automation, network optimization, waste reduction and media efficiencies.”
Mondelez International took a significant step forward in the bar category in 2022 when it acquired Clif Bar & Co. for approximately $2.9 billion.
“Clif grew double digits in '22, crossing $800 million in revenue and delivering a three-year CAGR of nearly 9% in retail revenue,” Mr. Zaramella said. “We expect significant top-line synergies, including deeper distribution and channel expansion in club, convenience and e-com, while refocusing on our core portfolio items.
“There are also large opportunities to improve velocities, build our capabilities and drive international expansion in large developed markets where we believe the brand can travel very well. Benefits are not limited to top line. There are also significant cost synergies in the areas of procurement, line efficiencies, broker commissions, logistics and warehousing.”
Headquartered in Mexico City, Ricolino was a business owned by Grupo Bimbo SAB de CV that Mondelez acquired for approximately $1.3 billion in 2022. The company manufactures candy bars, truffles, panned chocolates, caramel, lollipops, marshmallows, hard and chewy candies, nougats and gum sold under such brands as Ricolino, Vero, La Corona and Coronado.
“Ricolino … doubles our size in Mexico, a key priority market for us in Latin America,” Mr. Zaramella said. “These iconic, widely-loved brands and candy bars have still tremendous growth potential, both in Mexico and in the US where they appeal to a large and growing cohort.
“Its strong route to market, including more than 2,100 DSD routes and 440,000 traditional trade outlets will enable us to rapidly expand our share in biscuits and chocolate, while accelerating our entry into cakes and pastries. Ricolino delivered strong results in 2022, growing double digits. Integration is off to a good start, and Mexico and Latin America teams are very energized about the opportunity ahead.”