Mondelez deal for US snacks business Hu Master Holdings reveals major market focus
US snacks giant Mondelez has added another healthier snacks and chocolate product business to its portfolio in the form of Hu Master Holdings. In our latest guest blog, Dean Best of GlobalData, believes the business is right to react to evolving consumer trends through M&A.
Eighteen months after buying a minority stake in Hu Master Holdings, Mondelez International, one of the world’s largest snacks makers, has bought the fledgling US firm outright.
Hu markets vegan and paleo-friendly chocolate bars and has become, Mondelez says, “one of the fastest-growing confectionery brands” sold in the natural retail channel in the US. The Albany-based business has just started building the distribution of its products – which now also include grain-free crackers – into more mainstream outlets and, under Mondelez’s wing, stands a solid chance of carving out a foothold in the competitive US grocery market.
For Mondelez, the deal for Hu is another example of the Cadbury owner’s quest to offer a range of products to consumers looking for healthier snack options. Demand for indulgent treats remains strong. Consumers have sought comfort in chocolate and biscuits during Covid-19. Big brands have also benefited from Covid-19 lockdowns and the shift to most of the food we eat being bought through retail stores.
However, a long-lasting effect of the pandemic is likely to be that the already growing consumer interest in the links between diet and health will accelerate and intensify – and snacks will be no exception.
The move for Hu is not Mondelez’s first in the area. Last year, the Oreo maker snapped up a majority stake in Perfect Snacks, a US producer of chilled nutrition bars.
Expect more to come. 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. And, like with Hu, first buying a minority position in a business before a full acquisition can reduce some of the risk of an immediate outright purchase.
A danger, of course, is over-paying. Mondelez won’t be alone in wanting to gobble up better-for-you snacks as consumers look more often to treat themselves in healthier ways.