Mondelez hasn’t been able to escape the consumer demand for healthier snacks. The company, which is one of the worlds largest snack manufacturers, announced it will acquire Tate’s Bake Shop. Mondelez is hoping to close the deal this summer for around $500 million.
Consumers are no longer reaching for basic, sugar-filled snacks. They are becoming more concerned about healthy eating and what they put in their bodies, which is changing the way foods and drinks are produced. Mondelez is amongst the many companies who have had to accept this change.
Baked sweets and packaged cookies were not excluded from the healthy changes made in the food industry. Tate’s Bake Shop is known best for its premium bagged chocolate chip cookies. There is a high demand from consumers for Tate’s high-quality and real ingredients; brown cane sugar and butter. In fact, the cookie maker’s sales quadrupled during the past five years, suggesting that consumers still want to indulge in something sweet while being conscience of their treat’s ingredients.
This isn’t the first time Mondelez has customized products and invested in new product lines to please consumers. A prime example of this is the innovations made to its Oreo cookie, which it made by allowing customers to suggest new flavors, which also gives them a chance to win cash prizes.
Although revamping its brands has helped, it’s doubtful that these changes will promote growth in the long-term. This is why having Tate’s Bake Shop in Mondelez’ portfolio will influence their distribution network.
With this pending deal, it was disclosed that Tate’s Bake Shop plans to continue operate as a separate, stand alone business. This erases consumer fears that Tate’s will be changed due to the deal while still allowing Mondelez to get its products in front of more – or even new – consumers.
The company’s acquisition of Tate’s Bake Shop is just the latest in a number of Mondelez-backed investments in the healthier snack section. In 2015, they purchased Enjoy Life Foods which is an allergen-free snack maker and part of the $12 billion “free-form” product category. Even though they are slightly different, they both fall into the healthier, better-for-you snack category.
This change in the food industry isn’t surprising since it was predicted that in 2017, the industry would embrace more plant-based food and beverages. It was said more packaged snacks will include fruits, nuts and veggies in order to satisfy consumer priorities.
According to USA Today, Hershey, McDonalds, Walmart, Costco and Whole Foods are just some of the companies who have had to rethink what types of products they’re supplying.
“This is still the country where the customer is always right. I think companies rushing to clean up their labels to respond to consumer demand, like McDonald’s and others, that’s an indication of the direction,” Ken Cook, the president co- founder of the non-profit Environmental Working Group told the publication.
This shift in the food industry has everyone trying to fit under the better-for-you food umbrella – thankfully, there’s enough space for all companies to start making changes.