Molinos Río de la Plata, Argentina’s largest branded food products company, acquired La Salteña, a company producing refrigerated doughs and fresh & dry pasta, from General Mills, Inc. for an undisclosed amount. The purchase is scheduled to be closed on the 28th of January, 2019.
MarketsandMarkets™ View Point:
General Mills has been one of the fastest-growing consumer food companies in the US, catering to both domestic and international customers by constantly expanding its product line. La Salteña was one such brand under the umbrella of General Mills; it was the top marketer of refrigerated dough for the company. The acquisition of this brand by Molinos is part of the ambitious investment and growth strategy that the company had planned. Molinos is the food division of the Perez Companc Group, which recorded an annual sales of USD 735.1 million in 2016. It is stated that about 1/3rd of the revenue of Perez Companc Group related to its domestic sales. The addition of La Salteña to its business is expected to increase its revenue at the domestic front. This acquisition would also enable La Salteña to gain more visibility and popularity among its Argentinian customers.
Impact of Acquisition:
The retail business contributes to 60% of General Mills’ revenue. The company has a steady international demand from the Latin American region for baking mix and dough products in the winter season. With this acquisition, there could be a possible reduction in the company’s revenue flowing from its retail sector pertaining to Latin America. The parent company of Molinos, Perez Companc Group, stands to gain largely, in terms of customers and product portfolio.
The below figure shows the current market opportunity in the frozen bakery products market. It also showcases the growth rate and future opportunities in the market. China, India, and Latin American countries are expected to be the potential markets in the next 6 years.
e – Estimated, p – Projected
Source: MarketsandMarkets Analysis
Impact on Top Competitors:
Some of the major competitors in the frozen bakery products market include Associated British Foods plc (UK), Aryzta AG (Switzerland), Lantmannen Unibake International (Denmark), Europastry, S.A. (Spain), General Mills Inc. (US), and Kellogg Company (US). Other players include Conagra Brands, Inc. (Conagra) (US), Grupo Bimbo S.A.B. de C.V. (Mexico), Premier Foods plc (UK), and Vandemoortele NV (Belgium). Perez Companc Group, the parent company of Molino, stands a chance to capture a small yet promising market share in this business as a result of this acquisition. The competitors would also witness an increase in the product offerings of the company, as it plans to add more products to its existing portfolio.
Conclusion:
The acquisition of La Salteña is expected to have a profound impact on the visibility of the Molinos brand and the financials of the Perez Companc Group. The acquisition is expected to help Molinos achieve a better position in the market while also expanding its product portfolio in the Argentinian market. The movement of consumers to the Molinos brand will lend a positive influence to its products over the long term.