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Mondelez's (MDLZ) Chipita Addition Boosts Snacks Portfolio

Mondelez (MDLZ) is making prudent buyouts to drive growth. The buyout of Chipita strengthens MDLZ's snacking category.

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This story originally appeared on Zacks

Mondelez International, Inc. MDLZ focuses on expanding its business through strategic acquisitions and alliances. Management continuously boosts its product portfolio to better adapt to consumers’ tastes and preferences. Progressing on these lines, management announced the completion of the buyout of Chipita Global S.A., a major producer of sweet and salty snacks in Central and Eastern Europe. This buyout is a milestone in Mondelez’s plan to accelerate growth in the core snacking adjacencies and increase its foothold across major markets.

Management agreed to buy Chipita S.A. for nearly $2 billion in May 2021. The latest acquisition helps MDLZ expand its reach in the flourishing Central and Eastern European markets. This purchase increases MDLZ’s offering in the booming $65-billion global packaged baked snacks unit, thus expanding Mondelez’s baked snacks portfolio in Europe.

Chipita’s products are delivered across more than 50 countries. This croissants and baked snacks leader has been doing well across several countries for a while, given its robust innovation and manufacturing skills. The Chipita buyout will enhance innovation for Mondelez’s brands like Cadbury and Milka along with its croissant and baked snack labels, including 7Days.

Mondelez looks forward to enriching its distribution in the Central and Eastern European region using Chipita’s distribution-network capabilities. MDLZ can also leverage Chipita’s unique capacities with additional procurement and manufacturing proficiency.

Chipita is constantly gaining from its robust portfolio of croissant and baked snack brands, such as 7Days, Chipicao and Fineti. We believe that the addition of Chipita, which generated revenues of about $580 million in 2020, will reinforce MDLZ’s snacking portfolio.

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What’s More?

Coming to its other recent acquisitions, Mondelez took over a renowned sports performance and active nutrition brand Grenade before its Chipita buyout. Grenade’s on-trend and tasty products poise Mondelez well to grow in the U.K. as well as other markets.

Management had also acquired Australia-based food company Gourmet Food Holdings, which operates in the premium biscuit and cracker category. Mondelez completed the acquisition of Hu Master Holdings, the parent company of Hu Products on Jan 4, 2021. This transaction will provide further growth opportunities in chocolate and a cross-category potential in crackers for Mondelez. The Hu, Grenade and Gourmet Food buyouts are consistently contributing to MDLZ’s top-line growth apart from widening its footprint.

Zacks Investment ResearchImage Source: Zacks Investment Research

Mondelez is delivering growth on the back of brand investments, prudent buyouts, pricing actions and distribution expansion. This presently Zacks Rank #3 (Hold) stock has gained 12.2% in the past three months compared with the industry’s 3.1% growth.

Hot Consumer Staples Bets

Some better-ranked stocks are Flower Foods FLO, United Natural Foods UNFI and Medifast MED.

Flower Foods, the producer of packaged bakery foods in the United States, currently sports a Zacks Rank #1 (Strong Buy). Shares of FLO have increased 12.8% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Flower Foods’ 2022 sales suggests growth of 1.9% from the year-ago reported figure. FLO has a trailing four-quarter earnings surprise of 15.4%, on average.

United Natural Foods, the leading distributor of natural, organic and specialty food and non-food products in the United States and Canada, carries a Zacks Rank #2 (Buy) at present. Shares of UNFI have moved up 6.9% in the past three months.

The Zacks Consensus Estimate for United Natural Foods’ current financial-year earnings per share suggests growth of 7.8% from the year-ago reported number. UNFI has a trailing four-quarter earnings surprise of 35.4%, on average.

Medifast, the manufacturer of healthy living products, and other consumable health and nutritional products, currently carries a Zacks Rank of 2. Shares of MED have gained 13.7% in the past three months.

The Zacks Consensus Estimate for Medifast’s current financial-year sales suggests growth of 10% from the year-ago reported figure. MED has a trailing four-quarter earnings surprise of 17.3%, on average.



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Flowers Foods, Inc. (FLO): Free Stock Analysis Report

 

United Natural Foods, Inc. (UNFI): Free Stock Analysis Report

 

Mondelez International, Inc. (MDLZ): Free Stock Analysis Report

 

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