Dive Brief:
- Mondelēz International said Friday it will take a majority stake in Undercover Snacks. Financial terms of the deal, which is expected to close in the first quarter of 2027, were not disclosed.
- Undercover will operate as a standalone business within Mondelēz North America Ventures unit alongside other high-growth brands including Perfect Snacks, Tate's Bake Shop and Hu Chocolate. Diana Levy, founder of Undercover, will remain CEO.
- The stake in Undercover further expands Mondelēz’s snacking portfolio, with CEO Dirk Van de Put telling analysts that the Oreo maker's portfolio "needs to evolve towards healthier snacks."
Dive Insight:
Undercover grows Mondelēz's presence in better-for-you and permissible indulgence, allowing the Chips Ahoy! owner to capture more snacking occasions. Van de Put noted that as consumers age, they will be looking for “great tasting, better-for-you snacks that support a more active lifestyle.”
Undercover was founded in 2016 by Levy to provide a snacking option for two of her kids who were diagnosed with celiac disease. Unlike an indulgent chocolate chip cookie like Tate’s, Undercover's chocolate-covered and frosted quinoa crisps are positioned as having “healthy ingredients in disguise," Van de Put told analysts.
“We believe that over time, our portfolio needs to evolve towards healthier snacks, and this is one step in that direction basically,” Van de Put said.
Behind a portfolio spanning everything from Oreo and Chips Ahoy! to Ritz and Triscuits, Mondelēz products are carried in tens of thousands of retailers around the world. The company will use that reach and connection with retailers to grow Undercover's distribution.
Van de Put said even though Undercover is a small business, it is growing fast and has a large distribution opportunity, which Mondelēz can assist with. Mondelēz can also help in procurement, sharpen the brand’s consumer insight and boost marketing to accelerate its growth.
Levy said in a statement that the deal with Mondelēz is "an opportunity to build Undercover into something much bigger."
“Mondelēz shares our passion for great-tasting snacks and brings world-class capabilities that can help us innovate faster, reach many more consumers and build Undercover into a major global brand — while enabling us to preserve the culture, entrepreneurial spirit and passion for simple, high-quality ingredients that make Undercover special,” Levy said in a statement.
Undercover, sold in more than 25,000 retail locations and consumed by travelers on United Airlines, also has the advantage of being squarely positioned in trends that are popular with today’s consumers.
The snack uses simple, high-quality ingredients that are non-GMO, certified gluten-free and produced at a dedicated peanut-free, tree-nut-free facility in New Jersey. Undercover also is committed to sustainable sourcing, using Rainforest Alliance-certified cocoa and manufacturing its products in a facility powered by solar energy.
The acquisition comes as Mondelēz posted a 2.3% jump in revenue to $9.97 billion during its third quarter, with much of the growth coming outside its core markets of North America and Europe.
Latin America had the fastest sales growth, surging 12%. Revenue inched up 1.1% in North America and slipped 3.3% in Europe.
