The Huge Change Coming To Clif Bar's Business
While nothing in life may be a sure thing, some bets are better than others. Investing in the snack bar business could well be one of those bets. Per Verified Market Research, in 2021, the snack bar market was worth an estimated $22.18 billion. That value is expected to top $38 billion by 2028. Then there is the market for nutritional bars, which Data Bridge said was "valued at $1.3 billion in 2020" and could hit $2.48 billion by 2029 – assuming an annual growth rate of 8.43%.
Given the sector's growth potential, it should come as no surprise that global food conglomerate Mondelez International announced a deal where it would pick up the California-based Clif Bar & Company for $2.9 billion. The acquisition is expected to give Mondelez's global snack bar business a boost through the ownership of the company that makes Clif, Luna, and Clif Kid, per CNBC.
Clif Bar is the brainchild of Gary Erickson, who decided to work with his mother to develop a better-tasting energy bar after he went on a 175-mile bike ride in 1992. Mondelez isn't Clif Bar's first suitor; Quaker Oats had approached Clif Bar in 2000 with an offer of $120 million, but Clif turned them down, per The Wall Street Journal.
Mondelez and Clif saw the deal as synergistic
In a statement, Mondelez CEO Dirk Van de Put described this acquisition as another way to seek dominance in the domain of snack foods. His forward-looking description envisions a Mondelez that leads the pack with respect to "chocolate, biscuits and baked snacks." Van de Put added that "the U.S, Clif Bar & Company embodies our purpose to 'empower people to snack right.'" The purchase could fit with a shift in nutritional preferences among the company's customer base. In 2019, Mondelez surveyed consumers and found that many desired to see smaller portions and less-sugary versions of popular products such as Oreo cookies (via Reuters).
Clif Bar & Company CEO Sally Grimes declared the company's intention to "[stay] true to our deeply ingrained Five Aspirations – sustaining our people, planet, community, business, and brands – five bottom lines that have grounded our company since its founding and will remain our North Star going forward." Mondelez, which also owns brands including Cadbury, Toblerone, and Oreo, per CNN, said it would keep Clif's headquarters where it is now, in Emeryville, California, while its products would continue to be produced in Twin Falls, Idaho, and Indianapolis, Indiana.