Dive Brief:
- Mondelez International, Inc. and D.E Master Blenders 1753 BV have completed the merger of their coffee businesses, which has now created Jacobs Douwe Egberts (JDE), the global leader in pure-play coffee with more than €5 billion (approximately $5.55 billion) in annual revenues.
- "Upon closing, Mondelēz International received cash of approximately €3.8 billion and a 44 percent interest in the new joint venture, subject to standard post-close adjustments," according to a news release. D.E Master Blenders 1753's owner, Acorn Holdings BV, has a 56% share in JDE.
- Based in the Netherlands, JDE will be a market leader in 18 countries globally and will have a strong foothold in emerging markets.
Dive Insight:
This gives Mondelez more of an opportunity to focus on its snacks business while still being able to profit from the coffee segment with its 44% stake in JDE. After the JDE deal, approximately 85% of Mondelez's net revenues now come from biscuits, chocolate, gum, and candy.
Having such a heavily snack-branded portfolio may position Mondelez well in terms of the way consumers are spending their money these days. A recent white paper on the snacking industry reported that the industry is expected to grow to $47.5 billion by 2015, up from $34.2 billion a decade ago. Also, 37% of millennials say they will snack more in the future, and with Mondelez owning so many brands of millennials' childhoods, such as Oreo, Chips Ahoy, and Ritz, that demographic could be a boon for the company's snack brands going forward.