Mondelez acquires majority stake in Perfect Bar owner

Mondelez International purchased a majority stake in Perfect Snacks, the manufacturer of organic, non-GMO, nut butter-based protein bars and bites.

The food giant said the owner of the refrigerated Perfect Bar generated about $70 million in net revenue, with double-digit growth from the prior year. Terms of the deal were not disclosed.

Mondelez said it plans to operate Perfect Snacks as a separate business in order to “nurture its entrepreneurial spirit and maintain the authenticity of the brand,” while at the same time providing resources to help accelerate its growth.

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Mondelez’s purchase of Perfect Snacks further underscores several of the trends taking place in the food space today. The peanut butter bar and bites are organic, non-GMO, loaded with protein, and portable so snacking consumers can eat them on-the-go. Its use of simple, better-for-you ingredients also coincides with shoppers who are searching for products using real ingredients that they recognize when deciding what to buy.

“Well-being snacks in general, and refrigerated well-being snacks in particular, are a fast-growing segment and we look forward to working with and supporting the Keith family to help accelerate this brand’s great momentum,” Glen Walter, executive vice president of Mondelez and president of North America, said in a statement.

Mondelez is not the first large CPG company to venture into the better-for-you bar space, with Kellogg buying RXBAR for $600 million and Mars Wrigley taking a minority stake in healthy-snacking company Kind in 2017. Once associated with candy bars, pretzels, popcorn and chips, snacking has evolved into one of the fastest-growing segments in the food space, with sales of $89 billion annually.

The definition of a snack has also changed, with yogurt, nuts and energy bars among today’s trending options. While some food companies have internally developed their own lines or repositioned existing products to fit the trend — similar to Kellogg’s Cinnamon Toast Crunch or Frosted Flakes bars — many have turned to M&A to bulk up their presence in the fast-growing space.

Unlike previous bar purchases, this one involves a snack that has to be refrigerated. It’s possible this requirement could limit the instances when a consumer could eat it. Someone on a hike or on a long-distance trip may opt for something else.

But Mondelez, citing data from Mintel, said the U.S. refrigerated snacks segment generates $20 billion in annual sales and represents one third of the total U.S. snacking market. Within that space, well-being snacks — which includes nutrition bars, packs with nuts and fruits, yogurts and hummus — represent around $7 billion in sales. The segment is growing faster than other refrigerated snacks at around 8% annually during the past three years, the data showed.

The snack purchase in refrigerated adds a new facet to Mondelez’s snack portfolio, which has been methodically cultivated.
The company has positioned itself as a global snacking powerhouse with iconic brands such as Oreo and Cadbury.

It purchased Tate’s Bake Shop, a brand best known for its premium bagged chocolate chip cookies, for around $500 million a year ago. In 2015, the company gobbled up Enjoy Life Foods, an allergen-free snack maker that’s part of the $12 billion “free-from” product category. It also started an innovation hub for new snacking brands called SnackFutures.

Similar to Tate’s, Mondelez can leverage its distribution network and R&D resources to further scale Perfect Snacks and get its products in front of more consumers. It also plans to operate Perfect Snacks as a separate entity, with its founders maintaining a minority stake in the company. They will continue to run the business from its headquarters in San Diego and products will continue to be made at their current manufacturing locations.

Mondelez executives said in February the company will benefit from strong tailwinds in snacking — an area in which its portfolio of gum, chocolates, biscuits and candy collectively grew 2.8% in 2018, compared with 2.1% a year earlier. Adding Perfect Snacks to its portfolio will likely only accelerate that growth.

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