Mondelēz Expands Presence in China with Majority Stake Acquisition in Evirth
The acquisition marks a significant milestone for Mondelēz International in its strategic expansion into the fast-growing cakes and pastries category in China.
Mondelēz Acquires Majority Stake in China’s Evirth
Mondelēz International, the global snacking giant, announced that it has acquired a “significant majority stake” in Evirth, a leading cake and pastry manufacturer in China. This acquisition is seen as a strategic move to strengthen Mondelēz’s foothold in the growing cakes and pastries sector, alongside its established presence in chocolate and biscuits. The financial terms of the deal and the exact ownership share were not disclosed. However, the acquisition underscores Mondelēz’s focus on diversifying its portfolio by investing in fast-growing categories and regions.
Evirth is well-regarded in China for its production of frozen-to-chilled cakes and pastries. Mondelēz, known globally for its iconic brands like Oreo and Ritz, had previously invested a minority stake in Evirth. Through this initial investment, Mondelēz worked alongside Evirth to develop, manufacture, and distribute cakes and pastries featuring popular brands like Oreo and Philadelphia in the Chinese market. The latest deal builds on this collaboration, positioning Mondelēz to accelerate growth in the region and become a dominant player in the cakes and pastries market.
A Strategic Focus on Cakes and Pastries
The cakes and pastries segment represents a core area of focus for Mondelēz as it seeks to extend the reach of its popular snacking brands. According to the company’s leadership, the sector presents a significant growth opportunity, particularly in regions like China, where demand for high-quality cakes and pastries is increasing.
Martin Renaud, Mondelēz’s executive vice president and chief marketing and sales officer, emphasized the company’s ambition to establish a strong leadership position in the cakes and pastries space. He noted that the category lacks a “big, strong player” and that Mondelēz’s brands, including Oreo and Cadbury, are well-positioned to fill that gap. “Cakes and pastries is a segment where our brands can thrive,” Renaud said in a previous interview.
Mondelēz has long been focused on expanding its presence in the snacking industry, and its move into cakes and pastries reflects a broader trend of diversification through strategic acquisitions.
Building on Previous Acquisitions
Mondelēz’s acquisition of Evirth is not an isolated event. It is part of a broader growth strategy that has seen the company acquire multiple companies in various regions to strengthen its product offerings in specific categories.
In 2020, Mondelēz acquired Give & Go, a U.S.-based company that produces brownies, cupcakes, and other baked goods. This acquisition allowed the company to build a significant presence in the U.S. baked goods market. The following year, Mondelēz expanded its portfolio in Central and Eastern Europe by acquiring Chipita, a maker of croissants and baked snacks. Additionally, Mondelēz has introduced cakes and pastries under its existing brands. Oreo’s Cakesters, a soft snack cake, and Cadbury’s Chocobakes, a chocolate-filled layered cake, are just two examples of the company’s expansion into this category.
The acquisition of Evirth represents another step in Mondelēz’s strategy of using its existing brand equity to enter new product categories and occasions. By leveraging its iconic brands, Mondelēz can introduce innovative products that appeal to consumers looking for familiar flavors in new formats.
Expanding in the Chinese Market
China represents a particularly attractive market for Mondelēz. With a population exceeding 1.4 billion, the demand for high-quality snacking options is growing rapidly. The frozen-to-chilled cakes and pastries segment, in which Evirth operates, is currently valued at $3 billion and is expected to grow at a compound annual growth rate (CAGR) of 15%. Mondelēz sees this as a prime opportunity to tap into a market that is poised for sustained growth over the next several years.
The Evirth acquisition allows Mondelēz to strengthen its presence in China by offering consumers a wider range of snacking options. Cakes and pastries, in particular, present an opportunity to introduce Mondelēz brands to more occasions, such as birthdays and celebrations, where these products are often consumed.
As Mondelēz continues to expand in China, the company is well-positioned to become a leading player in the country’s frozen-to-chilled cakes and pastries market. By leveraging its international expertise and the local knowledge of Evirth, Mondelēz can introduce new products that cater to Chinese consumers’ tastes and preferences.
A History of Strategic Acquisitions
Since Dirk Van de Put became CEO of Mondelēz in 2017, the company has pursued a strategy of acquiring companies to fill gaps in its portfolio and expand into new categories. In addition to its acquisitions in the cakes and pastries category, Mondelēz has purchased several companies in other snacking segments to build a diversified product offering.
In the U.S., Mondelēz has acquired companies like Tate’s Bake Shop, known for its premium cookies, and Perfect Snacks, a maker of refrigerated protein bars. In 2022, Mondelēz made headlines with its acquisition of Clif Bar, a leading maker of energy bars. These acquisitions reflect the company’s ongoing commitment to strengthening its presence in fast-growing segments of the snacking market.
Van de Put has been open about the company’s acquisition strategy, revealing that Mondelēz considers 35 to 40 potential acquisition targets at the start of each year. While many of these opportunities never lead to a finalized deal, the company remains focused on identifying the right partners to drive growth and expand its portfolio.
Looking Ahead: The Future of Mondelēz
The acquisition of a majority stake in Evirth is the latest in a series of moves that demonstrate Mondelēz’s commitment to expanding its presence in the global snacking market. The company has successfully used its strong brand portfolio to enter new categories, and the cakes and pastries segment represents another significant opportunity for growth.
As Mondelēz continues to focus on strategic acquisitions, it is likely that the company will pursue additional opportunities to strengthen its portfolio and expand into new regions. With the Chinese market poised for rapid growth, the acquisition of Evirth positions Mondelēz to take full advantage of this opportunity while continuing to build on its strong brand presence.
The future looks bright for Mondelēz as it continues to innovate and expand its product offerings. By leveraging its iconic brands and strategic acquisitions, Mondelēz is well-positioned to remain a leader in the global snacking market for years to come.
This article outlines Mondelēz’s strategic acquisition of a majority stake in China’s Evirth, emphasizing its growth in the cakes and pastries segment. The deal highlights the company’s broader strategy of using acquisitions to diversify its product offerings and expand into new markets, particularly in China.
