We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Mondelez (MDLZ) Benefits From Portfolio Refinement Efforts
Read MoreHide Full Article
Mondelez International, Inc. (MDLZ - Free Report) has been leveraging its core strengths in key categories amid rising costs. The company has strategically expanded its snacking category, especially focusing on chocolates and biscuits, which have driven its performance.
MDLZ's focus on core categories, specifically chocolates and biscuits, has shown resilience and appeal, particularly as consumers prioritize snacking over traditional meals. Both these categories registered double-digit growth during the full year 2023, including an 11.9% surge in biscuits and a 14.5% increase in chocolates.
In the fourth quarter, the biscuit and chocolate categories registered sales growth of 5.5% and 11.2%, respectively. Management is focused on expanding its chocolate, biscuit and baked snacks categories as they present opportunities for solid growth and profitability. The company is on track to generate around 90% of its revenues through these categories in the long run.
Acquisitions, a Key Driver
MDLZ's growth strategy includes strategic acquisitions to broaden its portfolio and geographical footprint. Recent acquisitions have significantly contributed to revenue growth and strengthened the company's market presence in key regions. Acquisitions, such as Ricolino, Clif Bar, Chipita S.A., Grenade, Gourmet Food Holdings and Hu Master Holdings, have significantly contributed to the company’s revenue growth. These acquisitions have not only expanded Mondelez's product offerings but also strengthened its market presence in key regions.
Mondelez is committed to increasing focus on areas with higher growth potential. During the fourth quarter of 2022, the company announced the sale of its developed market gum business to Perfetti Van Melle. This move will help fund its recent buyouts and streamline its portfolio.
Several other food players have resorted to acquisitions to strengthen their portfolio. Hershey (HSY - Free Report) signed an agreement to acquire two production facilities from Weaver Popcorn Manufacturing in April 2023. The addition of Dot’s Pretzels (December 2021) has also been a perfect match for Hershey’s growing salty snacking portfolio. HSY’s acquisition of Lily's (June 2021) is also a significant addition to its portfolio.
Tyson Foods (TSN - Free Report) is another food player benefiting from buyouts. TSN acquired Williams Sausage Company in May 2023 to solidify its product portfolio and manufacturing capacity. The addition of Keystone Foods (November 2018) goes in tandem with Tyson Foods’ domestic and international growth strategy.
McCormick (MKC - Free Report) has strategically increased its presence through acquisitions to grow its portfolio. In December 2020, McCormick bought a 100% stake in FONA International, LLC and some of its affiliates. In November 2020, MKC also completed the acquisition of the parent company of Cholula Hot Sauce — a premium Mexico-based hot sauce brand. The buyout of Cholula accelerates McCormick’s growth potential across the condiment platform and widens the product portfolio in the hot sauce category.
Wrapping Up
Despite challenges such as cost inflation, Mondelez remains focused on operational efficiency and cost management. Management closely monitors various factors, including inflation trends, consumer behaviors and market complexities, to navigate uncertainties effectively. Mondelez’s continuous reinvestments in brands, impressive portfolio reshaping efforts and emphasis on core categories position it well for future growth and strong performance in the coming years.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Mondelez (MDLZ) Benefits From Portfolio Refinement Efforts
Mondelez International, Inc. (MDLZ - Free Report) has been leveraging its core strengths in key categories amid rising costs. The company has strategically expanded its snacking category, especially focusing on chocolates and biscuits, which have driven its performance.
MDLZ's focus on core categories, specifically chocolates and biscuits, has shown resilience and appeal, particularly as consumers prioritize snacking over traditional meals. Both these categories registered double-digit growth during the full year 2023, including an 11.9% surge in biscuits and a 14.5% increase in chocolates.
In the fourth quarter, the biscuit and chocolate categories registered sales growth of 5.5% and 11.2%, respectively. Management is focused on expanding its chocolate, biscuit and baked snacks categories as they present opportunities for solid growth and profitability. The company is on track to generate around 90% of its revenues through these categories in the long run.
Acquisitions, a Key Driver
MDLZ's growth strategy includes strategic acquisitions to broaden its portfolio and geographical footprint. Recent acquisitions have significantly contributed to revenue growth and strengthened the company's market presence in key regions. Acquisitions, such as Ricolino, Clif Bar, Chipita S.A., Grenade, Gourmet Food Holdings and Hu Master Holdings, have significantly contributed to the company’s revenue growth. These acquisitions have not only expanded Mondelez's product offerings but also strengthened its market presence in key regions.
Mondelez is committed to increasing focus on areas with higher growth potential. During the fourth quarter of 2022, the company announced the sale of its developed market gum business to Perfetti Van Melle. This move will help fund its recent buyouts and streamline its portfolio.
Several other food players have resorted to acquisitions to strengthen their portfolio. Hershey (HSY - Free Report) signed an agreement to acquire two production facilities from Weaver Popcorn Manufacturing in April 2023. The addition of Dot’s Pretzels (December 2021) has also been a perfect match for Hershey’s growing salty snacking portfolio. HSY’s acquisition of Lily's (June 2021) is also a significant addition to its portfolio.
Tyson Foods (TSN - Free Report) is another food player benefiting from buyouts. TSN acquired Williams Sausage Company in May 2023 to solidify its product portfolio and manufacturing capacity. The addition of Keystone Foods (November 2018) goes in tandem with Tyson Foods’ domestic and international growth strategy.
McCormick (MKC - Free Report) has strategically increased its presence through acquisitions to grow its portfolio. In December 2020, McCormick bought a 100% stake in FONA International, LLC and some of its affiliates. In November 2020, MKC also completed the acquisition of the parent company of Cholula Hot Sauce — a premium Mexico-based hot sauce brand. The buyout of Cholula accelerates McCormick’s growth potential across the condiment platform and widens the product portfolio in the hot sauce category.
Wrapping Up
Despite challenges such as cost inflation, Mondelez remains focused on operational efficiency and cost management. Management closely monitors various factors, including inflation trends, consumer behaviors and market complexities, to navigate uncertainties effectively. Mondelez’s continuous reinvestments in brands, impressive portfolio reshaping efforts and emphasis on core categories position it well for future growth and strong performance in the coming years.