CHINA – Mondelez International has announced a strategic acquisition of a significant majority stake in Evirth, a prominent Chinese bakery specializing in cakes and pastries.
This move, confirmed on September 23, 2024, marks a pivotal step in Mondelez’s ongoing efforts to enhance its presence in the cakes and pastries market, which CEO Dirk Van de Put identified as a key area for future growth.
Evirth, founded in 2013, is known for producing French-style desserts, including mille crepe cakes, Swiss rolls, mooncakes, and cookies.
The company operates three manufacturing facilities in Shanghai, Shenzhen, and Dongguan.
Mondelez previously held a minority interest in Evirth, which allowed it to develop and supply frozen-to-chilled cakes and pastries featuring its well-known brands, such as Oreo and Philadelphia.
However, the financial details of the new acquisition have not been disclosed.
In a statement regarding the acquisition, Van de Put expressed enthusiasm about the potential for growth within this category.
“We’re excited about the opportunity to accelerate our growth in cakes and pastries through continuous innovation,” he remarked.
He emphasised the importance of leveraging Mondelez’s high-value brands to create more premium tastes and formats.
China’s cakes and pastries market is estimated to be valued at US$3 billion, with an impressive compound annual growth rate (CAGR) of 15%.
This growth is driven by increasing consumer demand for fresh and premium options among younger demographics in major cities.
Linfeng Xu, founder and chairman of Evirth, echoed this sentiment during the announcement: “We are excited that Mondelez International is increasing its investment in Evirth, and this is a historic moment for us.”
He added that Mondelez’s expertise would enhance Evirth’s ability to deliver premium products to consumers.
This acquisition aligns with Mondelez’s broader strategy to expand its footprint in the global snacks market.
Van de Put noted that entering the cakes and pastries sector is a natural extension of their offerings in biscuits and chocolate. “It’s a highly fragmented sector valued globally at around US$80 billion,” he explained.
In China, he highlighted that chocolate accounts for US$4 billion, biscuits for US$8 billion, and cakes and pastries represent a substantial US$30 billion market.
Mondelez has been actively pursuing growth opportunities through acquisitions. In recent years, it acquired a majority stake in Canada-based Give & Go in 2020 and finalized the purchase of Chipita Global SA in 2022.
These acquisitions have strengthened Mondelez’s position in the baked goods sector across North America and Europe.
The deal with Evirth is still subject to regulatory approval in China but is expected to significantly bolster Mondelez’s capabilities within the fast-growing cakes and pastries category.
As consumer preferences evolve towards innovative snacking options, this acquisition positions Mondelez favourably to meet rising demands.
This acquisition reflects Mondelez’s commitment to expanding its portfolio and responding to changing consumer tastes within one of the world’s most dynamic markets.
As Van de Put concluded, integrating Evirth’s operations will allow Mondelez to serve its customers better while enhancing its product offerings across China’s vibrant snack lands
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