Mondelēz sells gum business; focuses on snacking in developed markets10 Jan 2023
Mondelēz’s plan to sell its gum business for $1.35bn, announced last month, reflects a strategy to reshape its portfolio, placing greater focus on its core chocolate, biscuit and baked snacks categories.
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.
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 where 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.
Gum category struggled during the pandemic lockdown
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.
Mondelēz to concentrate on chocolate and biscuit categories
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."
Additives in US food products up 10% since 2001
18 Jul 2023
New research revealed that 60% of foods purchased by Americans contained technical food additives as of 2019, which was a 10% increase since 2001.Read more
Industry first: The Netherlands approves cultivated meat and seafood tastings
17 Jul 2023
The Netherlands has become the first country in Europe to approve tastings of cultivated meat and seafood in controlled environments, yet there is still a long way to go before widescale commercialisation is achieved.Read more
One-fifth of Brazilian whey protein products mislabelled
12 Jul 2023
One fifth of whey protein products sold in Brazil are mislabelled, according to one small survey, as the Latin American trade association ALANUR calls on authorities to act against brands that inappropriately advertise the nutritional attributes of the...Read more
New Nordic nutrition guidelines emphasise plant-based eating
11 Jul 2023
Nordic scientists and experts are now recommending that people should consume less meat and more plants for both their health and the health of the planet.Read more
Manufacturers await groundbreaking aspartame safety review
10 Jul 2023
The WHO’s International Agency for Research on Cancer (IARC) is preparing to release its findings on whether the sweetener aspartame is a possible carcinogen.Read more
Food sector pushes unhealthy choices on consumers, new report shows
7 Jul 2023
Regulators and retailers must take action to prevent European consumers from being led to make unhealthy food choices, experts say.Read more
How to revive stagnating plant-based meat sales
6 Jul 2023
Sales of plant-based meat are stagnating, products are being withdrawn, and brands are declaring bankruptcy – but Rabobank’s RaboResearch has identified five strategies that could help revive the category, and precision fermentation could be an NPD gam...Read more
UK consumer trust in supermarkets falls to nine-year-low
5 Jul 2023
Research by UK consumer review organisation, Which?, reports decreasing levels of trust in the food industry, with two-thirds of shoppers feeling ripped off.Read more
UK retailers flout unhealthy product regulation
4 Jul 2023
UK retailers are continuing to promote unhealthy products that are high in fat, salt, and sugar (HFSS) despite recent regulation that bans such practices.Read more
Are Dutch supermarkets committed to human rights?
3 Jul 2023
Dutch supermarkets lack widespread measures to respect human rights in supply chains, research project Superlist Social's inaugural report finds.Read more