Image Source: Baking Business
Cadbury, the British chocolate company, has announced the purchase of Clif Bar & Company, a US energy bar company, for $2.9 billion (£2.4 billion).
The transaction would help Mondelez International, which also owns Oreo, Toblerone, and Milka, achieve its goal of “leading the future of snacking,” according to the company. According to the food and beverage behemoth, Clif’s goods will be manufactured at the company’s plants in Idaho and Indiana.
Mondelez issued a cautionary statement in March about the impact of increased manufacturing costs.
The American confectionary company said in a statement on Monday that the takeover will value its snack bar division at over $1 billion. It also stated that once the acquisition is completed later this year, it will continue to run Clif’s business out of Emeryville, California, where the company is based.
Dirk Van de Put, chairman and chief executive of Mondelez, welcomed Cliff Bar & Company’s iconic brands and enthusiastic workers into the Mondelez family in a statement on the acquisition. The purchase was exhilarating for him.
Dirk continued, “as we continue to scale our high-growth snack bar business,” the deal advances the company’s mission to lead the future of snacking by winning in chocolate, biscuits, and baked snacks.
According to the company’s website, Gary Erickson started Clif three decades ago after coming up with the idea for an energy bar after a 175-mile cycling ride. Clifford Erickson, Mr. Erickson’s father and “childhood hero,” was the inspiration for the bar, which debuted “after endless hours in mom’s kitchen.”
Mondelez was “the perfect partner at the right moment to help Clif in our next chapter of growth,” according to Sally Grimes, the company’s chief executive.
Last year, Mondelez recorded net revenue of about $29 billion, along with other global brands such as Daim, Ritz, and Belvita.
Costs are going up
However, like many of its competitors, it is suffering rising expenses and announced in March that Cadbury Dairy Milk sharing bars would be reduced by 10% in size.
It decreased the size of the bars from 200 to 180 grams while keeping the pricing the same.
“We try to absorb costs wherever we can,” a Mondelez spokesperson said. “However, in this challenging environment, we’ve had to make the decision to slightly reduce the weight of our medium Cadbury Dairy Milk bars for the first time since 2012.”
Nestle, the Swiss food behemoth, warned in April that growing ingredient costs would force it to raise product prices even further.
In the first three months of the year, the maker of KitKats and Nesquik said it increased its pricing by more than 5%.
Nestle CEO Mark Schneider warned that as expenses rise, “additional pricing and mitigation initiatives will be required throughout the year.”
