As an investor, you strive to stay on top of the latest mergers and acquisitions in the business world. Major deals can significantly impact stock prices and the overall trajectory of companies. The recent announcement that Mondelez International will acquire Clif Bar & Company for $2.9 billion in cash is one such deal worth noting.
Mondelez, the maker of brands like Oreo, Chips Ahoy, and Trident gum, will gain full ownership of Clif Bar, a leading maker of organic energy and nutrition bars. For Mondelez, the deal provides an opportunity to continue expanding into the fast-growing snack bar category, especially the better-for-you segment. Clif Bar will benefit from Mondelez’s scale and resources to help accelerate growth.
The transaction is expected to close in Q3 2021, pending customary closing conditions and regulatory approvals. As an investor monitoring the snack food and confectionery industries, keep a close eye on this major new partnership between two powerhouse companies. The deal could significantly impact future revenue and earnings for Mondelez and have ripple effects across related sectors.
Mondelez Makes a move into energy and nutrition bars
Mondelez International, Inc., announced today its acquisition of Clif Bar & Company, a privately held company based in Emeryville, California, for $2.9 billion. This move allows Mondelez to enter the fast-growing global energy bar category, tapping into the health and wellness trends affecting the snack industry.
Clif Bar is a pioneer in the energy bar segment, producing organic snacks and drinks. Their products are non-GMO and made with organic and sustainable ingredients. This acquisition provides Mondelez with a platform to build a global leader in energy bars, combining their expertise in brand building and distribution with Clif Bar’s authentic brand and connections with wellness-focused consumers.
This acquisition further delivers against our Vision 2030 focus on accelerating growth in chocolate and biscuits as well as baked snacks,†said Mondelez CEO Dirk Van de Put. As a leader in energy bars with annual sales over $300 million, Clif Bar expands our snacking portfolio and provides opportunities to accelerate our growth in well-being snacks around the world.
Founded in 1992, Clif Bar has become one of the leading brands in energy bars with a devoted consumer following. Their portfolio includes Clif Bars, Clif Minis, Clif Bloks, Clif Protein, and Luna Bars. The company employs around 250 people and generated net sales of more than $300 million in 2020.
Mondelez will operate Clif Bar as a separate business to nurture its entrepreneurial spirit while providing resources and expertise to expand internationally. This deal exemplifies Mondelez’s focus on accelerating growth through strategic acquisitions of brands that expand their product offerings and capture consumer trends.
A Win-Win Deal for Both Companies
Mondelez International, one of the world’s largest snack companies, announced today its acquisition of Clif Bar & Company, a privately held company that produces organic energy and nutrition bars, for $2.9 billion. This strategic acquisition is a win-win for both companies.
For Mondelez, the purchase of Clif Bar expands their portfolio of brands focused on well-being and provides a foothold in the fast-growing energy bar category. Clif Bar holds the number one position in the US energy bar market with a wide range of products featuring organic ingredients. By leveraging Mondelez’s global distribution network, Clif Bar will gain greater access to customers worldwide.
Clif Bar will benefit from Mondelez’s expertise in brand building, research and development, and supply chain management. While maintaining its headquarters in Emeryville, California, and operating independently, Clif Bar can tap into Mondelez’s resources to continue driving innovation in sustainable and nutritious products. Founders Gary Erickson and Lisa Thomas, who built Clif Bar into an iconic, purpose-driven brand, will remain on the management team.
This strategic move aligns with Mondelez’s vision to lead the future of snacking by offering the right snack at the right moment in the right way. Adding Clif Bar to its portfolio of over $26 billion in net revenues is a major step forward in achieving this vision through its focus on well-being snacks and accelerating growth in emerging categories. Overall, the acquisition signifies an exciting new chapter for both companies in meeting the growing demand for healthier snack options.
Clif Bar Will Become Part of Mondelez’s Fast-Growing Snacking Division
A Strategic Move
Mondelez International’s acquisition of Clif Bar & Company for $2.9 billion serves to strengthen its position in the fast-growing global snacking category. As the maker of brands like Oreo, Chips Ahoy!, and Ritz, Mondelez already has a strong foothold in the sweet snack segment. However, by purchasing Clif Bar—maker of popular energy bars, protein bars, and nut butters—the company will gain further access to the nutritional and performance snack market.
Expanding Into Faster-Growing Categories
The deal provides Mondelez with a platform to reach health-conscious consumers seeking nutritious, sustainable, and organic snack options. Energy bars, protein bars, and nut butters have become popular snacks for people pursuing an active lifestyle or looking for a quick boost of energy. These categories have experienced double-digit growth over the past few years as consumer preferences have shifted towards better-for-you snacks.
Acquiring Clif Bar allows Mondelez to diversify its portfolio beyond traditional cookies and crackers into these faster-growing areas. The company expects continued strong growth for Clif Bar and plans to expand the brand into new markets and distribution channels. Clif Bar’s products also complement Mondelez’s existing snack brands, presenting opportunities for cross-promotion.
Maintaining the Clif Bar Ethos
While Clif Bar will become part of Mondelez’s snacking division, the companies have agreed to operate Clif Bar as a separate subsidiary in order to preserve its unique culture and brand identity. Clif Bar was founded on the ethos of crafting nutritious and sustainable snacks, and the brand has built a very loyal customer base.
Keeping Clif Bar as an independent entity within Mondelez will allow it to stay true to its principles while still benefiting from Mondelez’s resources and expertise.
The $2.9 billion deal is a win-win for both companies and their shareholders. Mondelez gains a foothold in an attractive snack category, while Clif Bar finds a strategic partner to help accelerate its growth. By maintaining Clif Bar’s distinctive brand positioning and values, the acquisition promises to be very rewarding for consumers as well.
Clif Bar Founders Step Away as Co-CEOs but Remain on Board
Gary Erickson and Kit Crawford Step Down
Mondelezâ€TMs acquisition of Clif Bar will bring changes to the energy bar companyâ€TMs leadership. Co-CEOs and co-owners Gary Erickson and Kit Crawford, who founded Clif Bar in 1990, will step down from their leadership roles but remain on the board of directors in advisory positions.
After building Clif Bar into an iconic brand over the past three decades, Erickson and Crawford felt it was the right time to pass the torch to new leadership under Mondelez’s ownership. Mondelez, a leader in the snack food and confectionery industries, has a proven track record of acquiring brands while maintaining their unique identities. Erickson and Crawford will work closely with Mondelez in the transition to ensure Clif Bar’s mission and company culture are preserved.
A Commitment to Sustainability and Giving Back
Since its founding, Clif Bar has been a model for sustainable and philanthropic business practises. From using organic ingredients to operating an eco-friendly bakery, Clif Bar has built its brand around environmental and social responsibility. Under Mondelez’s ownership, Clif Bar will continue its commitment to:
- Using sustainable and organic ingredients
- Reducing environmental impact through green business operations
- Supporting community organisations through donations and volunteer programmes
- Sourcing fair-trade ingredients that support farmers and food communities
With Erickson and Crawford remaining on the board, Clif Bar is poised to uphold its core values even as it enters a new chapter. Their vision helped shape Clif Bar into a purpose-driven company, and they will continue to provide guidance to ensure its sustainable and philanthropic spirit endures.
The acquisition of Clif Bar expands Mondelez’s portfolio of better-for-you snack brands. By retaining Clif Bar’s leadership team and commitment to social responsibility, Mondelez recognises the importance of brand authenticity for Clif Bar’s loyal customers. With the resources and distribution network of its new parent company, Clif Bar is set to reach more consumers than ever before.
What This Means for Clif Bar Fans?
Product Availability
With Mondelez’s acquisition of Clif Bar, consumers can expect the nutritional snack brand to gain wider distribution. As one of the world’s largest snack companies, Mondelez has the capability to scale Clif Bar on a global scale. Clif Bar’s products should become more readily available in stores across various regions as well as online retailers.
New Flavours and Varieties
Mondelez is known for expanding brand portfolios through innovation. The company will likely invest in developing new Clif Bar flavours, varieties, and potentially line extensions. With additional resources and expertise, Clif Bar can broaden its product range to provide more options for customers. New products may include alternative snacks like granola mixes, nut butters, or organic fruit leathers.
Maintaining Brand Identity
While Clif Bar will benefit from Mondelezâ€TMs size and strength, itâ€TMs important the brand does not lose its identity. Clif Bar is known for crafting wholesome, nutritious snacks with sustainable and ethical practises. Under new ownership, Clif Bar should uphold its values and continue producing high-quality, organic ingredients to meet the expectations of loyal customers. If significant changes are made that compromise the brand’s integrity, it risks alienating its base. Mondelez must allow Clif Bar to operate independently to a certain degree.
Higher Prices are possible
When large companies acquire specialty brands, product prices sometimes increase. Mondelez may make changes to Clif Bar’s supply chain or business model that lead to higher costs of goods sold. If this occurs, the additional expenses could translate to moderately higher retail prices for consumers. While a small price hike is unlikely to severely impact demand, large increases may make the brand less accessible, especially for frequent purchasers. Mondelez should be prudent in managing costs to prevent aggressive price jumps after the acquisition.
Mondelez’s purchase of Clif Bar presents several opportunities and possible challenges. By making the brand more widely available, developing new products, and maintaining its identity, Clif Bar can thrive under new ownership. However, Mondelez must be careful to limit price increases and allow Clif Bar to uphold its values. If done successfully, the acquisition is a win-win for both companies and consumers.
Conclusion
As a consumer, this major acquisition will likely have little direct impact on you in the short term. However, it signals an ongoing trend of large food conglomerates acquiring popular niche brands to tap into growth trends like healthy snacking and sustainably sourced ingredients. While Clif Bar gets a huge influx of capital and resources to potentially accelerate growth, there is always a risk of the brand losing some of its authenticity under new ownership. Only time will tell if Mondelez can achieve the tricky balancing act of scaling the Clif Bar brand while maintaining its purpose-driven ethos. For now, you can continue to enjoy your favourite Clif Bar flavours, knowing the company has greater financial security and reach to spread its positive impact. Yet it remains to be seen if Clif Bar can thrive in the long run within the portfolio of a multi-billion-dollar processed food and beverage giant.
