- Mondelez International purchased Hu Master Holdings, a maker of premium snacks and chocolates made from simple ingredients, the company said in a statement.
- Mondelez took a minority stake in the paleo-friendly, clean-label snack brand and New York City restaurant Hu nearly two years ago. The investment was made through Mondelez’s SnackFutures business unit. As part of the deal, Mondelez was granted a right of first offer to acquire the company. The purchase of the rest of the business values Hu at around $340 million, The Wall Street Journal reported.
- Mondelez has methodically added to its snack-focused portfolio with a series of acquisitions in recent years that have spanned both indulgence and better-for-you offerings. Smaller deals "allow us to remain what we want to be, which is a great snacking company," Dirk Van de Put, Mondelez's CEO, said last year.
Few companies dominate the snacking space or have benefited by its rapid growth in recent years as much as Mondelez. The iconic brands manufacturer, which makes Oreo, Triscuit, Ritz and Cadbury, has been able to maintain its presence by innovating and expanding the reach of its core offerings, as well as purchasing brands that complement its portfolio. These acquisitions further entrench Mondelez's move toward simpler ingredients and better-for-you snacks.
Mondelez acquisitions include premium cookie maker Tate's Bake Shop, a user of sugar instead of high fructose corn syrup, purchased for about $500 million in 2018. A year later it acquired a majority stake in Perfect Snacks, the manufacturer of organic, non-GMO, nut butter-based protein bars and bites. In 2020, Mondelez added a majority interest in Give & Go, a North American leader in fully-finished sweet baked goods. The SnackFutures division has also tested out a handful of new snack lines by partnering with brands such Dirt Kitchen Snacks, which are made from non-standard vegetables, and cacaofruit snack brand CaPao.
According to a study Mondelez conducted with the Harris Poll in 2019, snacking is preferred to eating meals for 59% of adults worldwide. For millennials, that figure jumps to 70%. Four in five adults appreciated having both healthy and indulgent snacks readily available.
While consumers are indulging during the pandemic, they also are focusing more on their diet and health — trends that are expected to further accelerate going forward. Hu will allow Mondelez to benefit more from this shift also taking place in the snacking sector. Hu's chocolate, which fits into the paleo diet, is gluten free, organic and vegan. It's made without palm oil and cane sugar. Hu recently expanded into grain-free crackers. The snacking giant will be able to help expand Hu's reach it the competitive market place through its understanding of these spaces, connections with ingredient suppliers and relationships with retailers while maintaining the key product attributes.
"Hu is a strong strategic complement to our snacking portfolio in North America," Glen Walter, president of Mondelez International North America, said in a statement. "This well-being brand platform provides further growth opportunities in chocolate, cross-category potential in crackers, as well as meaningful opportunities to expand distribution including in eCommerce and premium conventional retail."
The fact that Mondelez took a stake in Hu and acquired the rest of the company less than two years later shows Van de Put and other executives like what they've seen from nine-year-old upstart. Unlike some of Mondelez's larger competitors, Van de Put has eschewed larger acquisitions in favor of strategic purchases — though he has publicly embraced making such a deal under the right circumstances.
With Mondelez averaging about one acquisition a year since he took over in late 2017, it's a good bet further partnerships, minority investments or outright purchases will come to fruition as snacking continues to evolve.
"Expect more [deals] to come," GlobalData analyst Dean Best said in a statement emailed to Food Dive. "Mondelez will continue to work on launching its own products but M&A will be a key part of its toolkit. In many ways, acquiring a business that already has a client base and has built a presence in the market is easier than developing your own."