Latest news with #Mondelez
Mint
2 days ago
- Business
- Mint
Kraft Heinz split: Cold cheeses are a burden for its hot sauces
When schools returned to in-person learning in the fall of 2021 after the pandemic, parents scrambled to find Lunchables to put in their children's backpacks. Today, the meal kit of processed meats and cheese may be off the menu amid the desire for healthier food, but its manufacturer, Kraft Heinz, is firmly on it. The company is exploring spinning off the division that makes Lunchables, alongside Kraft cheese and Oscar Mayer hot dogs from its faster-growing arm that makes ketchup. A split could deliver modest value for shareholders. The biggest upside, though, would come from tempting bidders to pay up for each of the individual companies. To recap: Warren Buffett's Berkshire Hathaway and private equity firm 3G Capital acquired J.H. Heinz for $28 billion, including debt, in 2013. Two years later, they merged it with Kraft Foods, the US grocery business that had been spun out of what would become Mondelez International (more on that later). Also Read: Face the M&A truth: Mergers are glitter but grit is gold But Kraft Heinz has grappled with changing consumer tastes and, most recently, the rise of GLP-1 weight-loss drugs. As sales have come under pressure, its shares have lost 70% since 2017. Little wonder then that the company said in May that it was 'evaluating potential strategic transactions" to boost its stock price. The logic for a split is straightforward. Kraft Heinz's sauces, spreads and condiments business, which generates annual sales of about $11 billion, is growing faster than processed meat and cheese. People are seeking more flavour in their food, particularly if their appetites shrink—either because they are getting older or taking obesity treatments. Freed from their more sluggish sibling, brands like Grey Poupon mustard and Lea & Perrins sauce could command a higher valuation multiple. There is a precedent here—ironically from Mondelez. After Kraft was spun off, Mondelez retained the sexier international, confectionary and snacking segments. It has delivered a total return of over 200% since October 2012, almost double the S&P 500 Packaged Foods Index, and trades at a forward enterprise value-to-ebitda multiple of about 15. Kraft Heinz's slower-growing grocery arm, which could have sales of about $14.5 billion, would be valued less generously. It would still be highly cash generative, though, so it could appeal to an investor looking for a steady dividend payer. Analysts at T.D. Cowen estimate that the sauces, spreads and condiments division could be worth $29.5 billion and the grocery arm about $25 billion. Together, that's only just ahead of Kraft Heinz's enterprise value of $51 billion. Also Read: To split up or not? Conglomerates should never go by off-the-shelf answers Given that much of the upside might be swallowed by the higher costs of operating both companies, why bother with a breakup? Because both companies might prove tantalizing to a bidder. This is exactly what happened in the case of Kellogg. The company spun off its North American cereals business as W.K. Kellogg Company in late 2023. The racier snack-foods arm, maker of Cheez-It and Pringles, was renamed Kellanova. Almost a year ago, Mars paid $36 billion, including debt, for Kellanova, a 44% premium to the share price in the preceding 30 days. Last week, privately held Ferrero International, maker of Nutella, agreed to buy W.K. Kellogg, whose brands include Froot Loops and Corn Flakes, for an enterprise value of $3.1 billion. The $23-a-share cash offer equated to a 40% premium to the share price in the preceding 30 days. Kraft Heinz's sauces, spreads and condiments arm would fit in McCormick's portfolio, an analyst at Bloomberg Intelligence told me, although there may be competition concerns. And now that Unilever is offloading its ice-cream business, might it be interested in bulking up in dressings? Also Read: The Godrej split holds valuable lessons for family businesses As for the grocery business, it could appeal to a private equity buyer drawn to its cash flow. One complication is that Kraft Heinz is expected to have net debt of just over $18 billion at the end of this year, and much of that is likely to be allocated to the food maker. This might make it harder for a financial buyer to load up on borrowings. Still, if this hurdle could be overcome, there could be scope to add other low-growth but cash-generative food businesses to build scale. If both of Kraft Heinz's component parts are as successful in selling themselves as Kellogg's, this would certainly be a tasty treat for investors. Since news of Kraft Heinz potentially doing the splits broke at the weekend, there has been much discussion of de-consolidation in the consumer sector. But like Lunchables leaving school bags, this looks more like a prelude to a corporate disappearing act. ©Bloomberg The author is a Bloomberg Opinion columnist covering consumer goods and the retail industry.
Yahoo
4 days ago
- Business
- Yahoo
A classic Canadian chocolate bar just got quietly discontinued
If your childhood snack drawer included a Jersey Milk bar, this one might sting. After 75 years on Canadian shelves, Mondelez, the maker behind the confectionary best used for smores, has quietly pulled the plug on the creamy white-wrapped classic, citing low demand. No press release. No farewell tour. Just gone, like the last piece of Halloween candy you swear you saved. For many Canadians, Jersey Milk was a time machine in the form of a chocolate bar. Smooth, simple, no-frills milk chocolate. Like the kind your grandmother kept in a glass dish, or that showed up in Christmas stockings before fancy dark chocolate took over. Maybe it was the last chocolate you'd grab from your Halloween stash, before you'd take that bite that reminded you how good it really was. It wasn't flashy, but it was ours. Don't Miss Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich — and 'anyone' can do it The Canadian economy is showing signs of softening amid Trump's tariffs — protect your wallet with these 5 essential money moves (most of which you can complete in just minutes) I'm almost 50 and don't have enough retirement savings. What should I do? Don't panic. Here are 6 solid ways you can catch up Other bittersweet goodbyes Jersey Milk's departure is the latest in a bittersweet trend: Iconic Canadian treats disappearing as tastes shift and costs climb. Remember Cherry Blossom bonbons? The syrup-soaked cherry, coated in chocolate and chopped peanuts, once made in Quebec and a weird-but-wonderful Valentine's Day tradition? Gone by early 2025, after years of declining sales and a move to U.S. production. Clodhoppers, born in a Winnipeg kitchen and beloved for their fudge-covered graham crunch? Vanished in 2012, never quite the same after being bought and rebranded. Even the Maritimes lost a legend: Ganong's wintergreen mints, a pink, puckering staple since the 1800s, were discontinued in 2019. And it's not just chocolate. Frozen favourites are melting away too. The Choco Taco — that crunchy, creamy dessert taco that tasted like freedom from the back of an ice cream truck — was axed in 2022. The internet did what it does, sharing memes, petitions and even garnering a joke from a U.S. senator about using the Defense Production Act. But it wasn't enough. You can add Jell-O Pudding Pops, Funny Feet popsicles and Good Humor's Toasted Almond Bars to the list. All gone. All missed. Read more: Here are — and very quickly regret. How many are hurting you? The business of letting go There's more behind this "candy purge" than changing palates. Food companies are under pressure, from rising cocoa prices, supply chain issues, inflation and limited shelf space. Nostalgic favourites that don't perform get quietly shelved to make room for protein-packed bars, plant-based snacks or TikTok-ready novelty candies. And there's money in nostalgia. Discontinued treats often spark bidding wars online. Specialty retailers and resellers capitalize on limited runs. One box of Cherry Blossoms might now fetch triple its store price, if you can find it. A final wrapper on the trend So what's a nostalgic snacker to do when the candy aisle starts feeling emptier? First, keep an eye on the shelves. If a childhood favourite starts vanishing from your local store, that might be your cue to stock up. Once the news breaks, prices can spike and resellers know exactly what you're willing to pay for a taste of the past. Second, take a closer look at those impulse buys at the checkout. As legacy treats disappear, you might find yourself indulging less, not just emotionally, but financially too. That quiet shift could actually be saving you money, one less candy bar at a time. Finally, there's a silver lining: the rise of DIY nostalgia. Online, there's a thriving community of snack revivalists sharing recipes for everything from homemade Clodhoppers to Cherry Blossom knockoffs. Recreating a lost treat in your kitchen might not come with foil or retro branding, but it just might taste like memory. One last bite The death of Jersey Milk is a business move, yes. But it's also another small goodbye to a version of Canada that's fading. As new flavours rise and old favourites disappear, the snack aisle is turning into a reflection of our changing tastes and the changing times. So next time you grab a chocolate bar, give it a second look. It might be the last one you'll ever see. What To Read Next Are you rich enough to join the top 1%? Here's the net worth you need to rank among Canada's wealthiest — plus a few strategies to build that first-class portfolio Warren Buffett's Berkshire Hathaway bought nearly 26 million shares of this Canadian company in 2024 — here are 3 ways to help you invest like the Oracle of Omaha Here's how 2 minutes could get you up to $5M in life insurance coverage — with no medical exam or blood test 'You're going to live on beans and rice': This senior told Dave Ramsey she has debt and zero savings — here's his response plus 3 retirement saving tips to get you back on track This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Sign in to access your portfolio
CNBC
5 days ago
- Business
- CNBC
This snack maker is a buy as the outlook for cocoa prices improves, says Jefferies
Mondelez International will get a boost from an improving outlook in cocoa prices, according to Jefferies. The firm upgraded the snack maker to buy from hold in a Thursday note and raised its price target to $78 per share from $66. Jefferies' new forecast implies about 16% upside from Wednesday's close. Mondelez's portfolio of chocolate products includes Oreo and Chips Ahoy cookies. "Cocoa inflation has been a headwind to profit recently, although with an improving cocoa supply/demand outlook, limited volume hit despite high cocoa-driven price increases, and strong execution capabilities, the company is positioned well to recover input cost inflation and grow faster vs. center-store peers," analyst Scott Marks said. Cocoa futures are down more than 37% year to date after hitting a record high in December. Marks also said Mondelez is "advantageously positioned in faster-growth snacking categories with exposure to faster-growth markets relative to many of its US peers, and with a well-positioned balance sheet." The analyst added that while there are signs that the U.S. consumer remains under pressure, strength in Europe and the overall cocoa market should both be tailwinds for Mondelez. "While U.S. retail sales data suggests a still pressured consumer, we believe Europe dynamics, strong execution, and an improving cocoa outlook position MDLZ well for profit upside in '26 and beyond," he said. Mondelez International shares, which are up 13% year to date, rose about 1% in the premarket after the Jefferies upgrade. MDLZ YTD mountain MDLZ year to date Analysts are mostly bullish on Mondelez. Of the 29 who cover it, 19 rate it a buy or strong buy, LSEG data shows.
Hans India
6 days ago
- Business
- Hans India
Hindustan Coca-Cola Beverages Names New CEO
The Coca-Cola Company announced today that Hemant Rupani, a veteran business leader with experience across several companies and industries, will join Bangalore-based bottler Hindustan Coca-Cola Beverages Pvt. Ltd. as CEO, effective Sept. 8. Hemant comes to Hindustan Coca-Cola Beverages, or HCCB, after a nine-year career with Mondelez International Inc. Hemant currently serves as Mondelez's business unit president for southeast Asia, which includes Indonesia, the Philippines, Vietnam, Malaysia, Singapore and Thailand. Hemant will succeed the current HCCB CEO Juan Pablo Rodriguez, who is moving to a new opportunity in the Coca-Cola system. Hemant will report to the HCCB board of directors. Hemant is a highly accomplished business leader who has delivered impressive results and driven commercial success over his career. He brings a strong blend of experience in both Indian and multinational organizations. HCCB looks forward to him helping deliver on the bottler's considerable investment in India. Hemant, a native of India, joined Mondelez in 2016 as director of sales for India. He went on to serve as vice president and managing director for Vietnam before being promoted to his current role in 2022. Hemant began his career in 1997 with paint company ICI India Limited. In 1999, he joined PepsiCo in India and, in 2002, moved to Infosys Technologies. In 2004, he returned to PepsiCo, where he spent the next six years. He held roles of increasing responsibility, eventually becoming senior vice president, customer marketing, India Beverages. In 2010, Hemant joined Vodafone and, in 2014, moved to food company Britannia Industries as vice president, sales and business head, breads. Hemant earned a bachelor's degree in mechanical engineering from Regional Engineering College in Jaipur, India, and an MBA in marketing from the Faculty of Management Studies, University of Delhi. HCCB is the largest Coca-Cola bottler in India. In December 2024, The Coca-Cola Company announced an agreement for Jubilant Bhartia Group to acquire a 40% stake in Hindustan Coca-Cola Holdings Pvt. Ltd., HCCB's parent company.
Times
7 days ago
- Business
- Times
Cadbury owner's shrinking chocolate is Germany's biggest rip-off
There were Pom-Bärs that boasted of containing 50 per cent less fat than regular crisps but failed to mention that they also had six times the sugar content. There was the French drinking yoghurt that claimed to strengthen the body's defences against illness but was immunologically indistinguishable from regular yoghurt. And then there was the boutique organic tomato sauce for children that had 240 per cent of the sugar found in its adult equivalent. • The experts' guide to the probiotics that work The latest winner, however, of the 'Golden Windbag' award, conferred by German consumer rights activists on the 'most blatant advertising lie of the year', is the incredible vanishing chocolate bar. Mondelez, the American processed food conglomerate behind brands such as Cadbury, Toblerone and Ritz biscuits, is the first company to receive the unwanted award for ' shrinkflation', the practice of furtively downsizing a product while maintaining or increasing its price. Its Milka Alpine Milk bars, which are especially popular in Germany, have dwindled from 100g to 90g — but the price has risen from €1.49 to €1.99. The brand is also sold in the UK ALAMY Foodwatch, the campaign group that runs the Golden Windbag award — the title is a pun on the German word windbeutel, which can also refer to a profiterole or a cream puff — calculated that this was equivalent to a 48 per cent stealth increase in the price per gram. 'Mondelez is tricking the people in the supermarket and making a pile of money in the process,' Chris Methmann, the director of Foodwatch, said. 'Shrinkflation is legalised consumer deception and the German government is leaving people to deal with it on their own.' Mondelez has been contacted for comment. The company told Tagesschau, the national public broadcaster's flagship television news programme, that it had announced the change on its website and printed the new weight on the front of the packet. It said it had been obliged to take 'carefully considered measures' to deal with the soaring cost of cocoa, and inflation across its supply chain. Shrinkflation has existed for decades but the term has come into vogue in recent years as manufacturers have been caught between rising input costs and shoppers with increasingly constrained budgets. • 15 biggest food myths, debunked Prominent cases have included Ben & Jerry's quietly scaling down its ice-cream tubs in Europe from 500ml to 465ml, while publicly denouncing its rivals for doing much the same in the US. The practice has become especially common in the world of chocolate as the price of cocoa beans has fluctuated, and surged since the middle of 2023. An early example was Toblerone, which was forced to reverse its decision to skimp on chocolate by increasing the size of the gaps between the distinctive triangular peaks of its bars in 2016.
