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Mondelez (MDLZ) Teams Up With Lotus Bakeries, Fuels Expansion

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Mondelez International (MDLZ - Free Report) , a prominent leader in the global snacks industry, has been focused on driving growth by concentrating on its core chocolate and biscuit categories. The latest example is the company’s collaboration with Lotus Bakeries, aimed at expanding the Biscoff brand in India and developing co-branded chocolate products in Europe.

Inside the Headlines

By teaming up with Lotus Bakeries, Mondelez will employ its extensive distribution network and local market presence to manufacture, market, distribute and sell Biscoff cookies in India. While Lotus Bakeries aims to substantially increase its brand recognition and sales in this high-growth market, this partnership will help MDLZ strengthen its already solid footing in traditional and modern trade in order to strategically place its cookie offerings in high-demand premium categories.

Furthermore, Mondelez and Lotus Bakeries plan to work together on creating and launching innovative chocolate products through the combination of unique, caramelized, crunchy Biscoff taste and texture with MDLZ’s well-known brands like Cadbury and Milka. Although specific formats are still in the initial development phase, the focus remains on introducing exciting innovations to delight chocolate enthusiasts. The initial co-branded products are scheduled to launch in early 2025, with combinations such as Cadbury and Biscoff in the United Kingdom, and Milka and Biscoff in Europe.

Notably, this collaboration opens new avenues for both companies to speed up their growth plans in the lucrative cookie and chocolate categories, with the potential to venture into other markets and related segments.
Management views this collaboration to advance its strategic emphasis on the cookies category by introducing a cherished premium brand to a broader audience. On the other side, Lotus Bakeries views this partnership as a strategic opportunity to expand Biscoff's presence in the dynamic Indian market, capitalizing on Mondelez's strong local presence and distribution capabilities.

Focused on Growth

MDLZ continues to reinvest in its brands and capabilities alongside significant portfolio reshaping efforts, positioning the company strongly for future growth. With a strategic focus on core categories like chocolate, biscuits and baked snacks, it enhances brand appeal.

As consumers prefer snacking over traditional meals, the company’s core categories — chocolates and biscuits — have historically depicted resilience to economic downturns and pricing actions. This was, in fact, witnessed in the first quarter of 2024, wherein its core categories of chocolate, biscuit and baked snacks continued to show significant resilience and lower elasticity compared to the broader food universe.

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 by 2030. Also, the Zacks Rank #3 (Hold) company prioritizes operational efficiency and cost management. These initiatives have been instrumental amid a tough operational landscape and escalated costs.

Shares of the company have lost 6.5% in the past six months compared with the industry’s decline of 2.7%.

Nevertheless, growth endeavors like the above-mentioned partnership with Lotus Bakeries are likely to add new leaves to Mondelez’s success story.

Zacks Investment Research
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3 Solid Picks

Here, we have highlighted three better-ranked stocks, namely, Vital Farms (VITL - Free Report) , Vita Coco Company (COCO - Free Report) and Ollie's Bargain Outlet (OLLI - Free Report) .

Vital Farms offers a range of produced pasture-raised foods. It currently sports a Zacks Rank #1 (Strong Buy). VITL has a trailing four-quarter average earnings surprise of 102.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings suggests growth of 22.5% and 59.3%, respectively, from the year-ago reported numbers.

Vita Coco, which develops, markets and distributes coconut water products, currently flaunts a Zacks Rank #1. COCO has a trailing four-quarter earnings surprise of 25.3%, on average.

The Zacks Consensus Estimate for Vita Coco’s current financial-year sales and earnings implies an improvement of 3.5% and 40.5%, respectively, from the prior-year actuals.

Ollie's Bargain, the extreme-value retailer of brand-name merchandise, currently carries a Zacks Rank #2 (Buy). OLLI has a trailing four-quarter earnings surprise of 10.4%, on average.

The Zacks Consensus Estimate for Ollie's Bargain’s current financial-year sales and earnings indicates a rise of around 7.9% and 13.1%, respectively, from the year-earlier levels.

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