15 May 22 Mondelēz plans to divest gum brands – but not in emerging markets
Mondelēz International will divest its gum and mint business in developed markets to accelerate growth and focus its portfolio on “attractive chocolate, biscuits and baked-snacks categories”.
In a report to investors, Mondelēz reveals that going forward, it plans to generate 90% of its revenue from cookies and chocolate. It will be looking to sell off its gum and mint brands, which include Dentyne, Trident and Halls, in First World markets while holding on to them in developing-world ones.
Cookies and chocolate made up 79% of Mondelēz’s net revenues in 2021, while gum and candy comprised 10%. Gum and mints were one of the hardest-hit categories during the pandemic, as masked consumers were less self-conscious about their breath.
Gum brands to be sold include its Dentyne and Trident products, part of a portfolio with annual net revenues of around $450m.
Halls, which has annual net revenues of around $470m, dates back to the 1930s, when it was founded by the Halls Brothers in the UK. It is now a major player in the throat soothers and cough sweets markets on both sides of the Atlantic.
But the company said it will continue to operate other brands and products within its candy business, as well as its emerging market gum business.
A spokesperson told US broadcaster CNN it had just started looking for a buyer for the assets it plans to sell and that there is no timeline yet for a sale.
Mondelez said it wants to redeploy capital to higher-growth businesses and acquisitions.
This was reflected in its acquisition last year of Chipita, a company that sells croissants and other baked goods in Europe, and, more recently, Mexican confectioner Ricolino. Last year it acquired UK performance nutrition company, Grenade.
It said Halls has the potential for greater value under new ownership.
CEO Dirk Van de Put told investors: “Our competitive advantages in the marketplace and focused strategy on global snacking leadership give us great confidence in our ability to sustain strong top- and bottom-line growth for many years to come.
“Building on our category leadership, favourable geographic footprint, and the power of our iconic brands, we are well-positioned for stronger growth in the decade ahead.”
Mondelez said last June that it was reviewing its position in the chewing-gum market, which has been hit by the Covid-19 pandemic, reducing mobility and on-the-go sales.
According to GlobalData, for example, the gum market in the US has been in steadily decline and is forecast to continue to fall in value.
Source: Reuters, just-food.com