Mondelez International, owner of Cadbury Milka and Milka brands in China, has strengthened its presence in the country with the acquisition of Evirth. The frozen cake and pastry giant is a major player in China.
The acquisition, which is subject to approval by that country's regulator, will mark a major step forward in the company's growth strategy in Asia and in its cakes, pastries and other products.
Mondelez International Expands Operations in China
Mondelez International held a minority stake in Evirth where its brands, including Oreo® and Philadelphia®, were integrated into production.
In China, demand for cakes and pastries is expected to grow by 15.1% per year. This growth will be driven by consumers looking for premium products with innovative taste profiles.
China is one of them Mondelez targets several growth markets.Where the bosses said there was great sales potential. Brazil, India and Mexico were also seen as growth markets.
The company will look to expand the cakes and pastries category in several of its territories, as it is a “natural extension of biscuits” and a billion-dollar global market, Mondelez CEO Dirk Van de Put said in a previous business briefing. We have an inherent right to be in this market.
Last year, the company invested 30 million euros in its bakery in Herentals, Belgium, where TUC and Prince products are produced.
Untapped potential in the bakery market
The "reframing" of Mondelez's biscuit division into bakery has made it easier for the company to focus its efforts on pastries and cakes. said Snackfutures Ventures boss Richie Gray.
It’s next to chocolate and biscuits. Chipita was one of our biggest acquisitions when we decided to reframe biscuits in bakery. It was the first step we took into the European pastry market. There is huge untapped potential [in this category for Mondelēz International].”
Van de Put, CFO Luca Zaramella and others have suggested that cocoa prices could be stabilizing after months of record highs due to weather-related harvests.
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