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Mondelez (MDLZ) Acquires Hu to Boost Snacking Portfolio

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Mondelez International, Inc. (MDLZ - Free Report) has always been keen on expanding its business through acquisitions. Keeping along these lines, the company completed the acquisition of Hu Master Holdings, the parent company of Hu Products on Jan 4, 2021. Hu — a well-being snacking company established in 2012— is a category leader in premium chocolate in the United States. Also, Hu is one of the rapidly-growing confectionery brands in the natural channel. In April 2019, Mondelez had made an initial minority investment in Hu via its SnackFutures.

Hu will work as part of the North American Ventures business model while focusing on providing ultra-high-quality chocolate and snacks. The newly-acquired company will carry on manufacturing of all items from its present facility. Also, its senior leadership will be entitled to a contingent payment, which will be based on the company’s ongoing performance.

Notably, the acquisition of Hu will provide further growth opportunities in chocolate and cross-category potential in crackers for Mondelez. Moreover, the deal will provide the company important opportunities to grow distribution network that includes e-commerce as well as premium conventional retail channels.

 

Accretive Acquisitions and Partnerships: A Major Focus

Mondelez is strengthening the business through prudent acquisitions. To this end, it acquired majority interest in Give & Go (in April 2020), which is a pioneer in fully-finished sweet baked goods. In previous developments, the company made investment in Uplift Foods (in March 2019) as part of the SnackFutures platform. In July 2019, it acquired minority stakes in Perfect Snacks. These investments indicate management’s efforts to boost offerings. Also, in January 2018, the company teamed up with Post Consumer Brands, a business unit of Post Holdings, to create two new cookie-inspired breakfast cereals.

Further, some notable buyouts of the company include acquisition of Tate’s Bake Shop (June 2018) and Cadbury. These buyouts expanded Mondelez’s routes-to-market around the globe, especially in emerging markets. The company’s focus on undertaking acquisitions to gain scale in its categories and distribution capabilities bode well.

All said, we believe that the acquisition of Hu is another step toward solidifying Mondelez’s snacks brand portfolio that boasts some iconic brands like Tate’s and Perfect Snacks. Shares of this Zacks Rank #3 (Hold) company have increased 6.9% over a year compared with the industry’s 2.6% growth.

Better-Ranked Food Stocks

B&G Foods, Inc. (BGS - Free Report) — sporting a Zacks Rank #1 (Strong Buy) at present — has a trailing four-quarter earnings surprise of 9.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sysco Corporation (SYY - Free Report) , also a Zacks Ranked #1 stock, has a long-term earnings growth rate of 11%.

The Hain Celestial (HAIN - Free Report) , currently carrying a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 24.6%, on average.

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