Mondelez, Post Consumer Brands Team Up, Expand Cereals Range

Mondelez International, Inc. (NASDAQ:MDLZ) has teamed up yet again with the third-largest cereal company in the United States, Post Consumer Brands, to create two cookie-inspired breakfast cereals.

The new Post NUTTER BUTTER and CHIPS AHOY! cereals are inspired by classic, NUTTER BUTTER and CHIPS AHOY! cookies. In July 2017, the companies had teamed up to bring back Post OREO O's, which have been off store shelves since 2007. Also, they created a cereal — Honey Maid S’mores. It is to be noted that Post Consumer Brands is a business unit of Post Holdings, Inc. (NYSE:POST) , formed from the combination of Post Foods and MOM Brands in May 2015.

The North American food industry is seeing growing demand for healthier products, changes in consumer dynamics and a shift in spending toward lower-priced products. As a result of this, food companies like Kellogg Company (NYSE:K) , General Mills Inc. (NYSE:GIS) have been witnessing weak sales over the past few quarters.

Given the sluggish growth and slowdown in consumption in the food industry, co-branding is expected to bring success to companies. In line with this, Cereal Partners Worldwide deserves special mention. General Mills formed a joint venture with Nestle called Cereal Partners Worldwide, which serves customers in more than 130 global markets.

Mondelez has been refreshing its brand portfolio through product innovation and extending brands to newer geographies and platforms. The company is increasing investments in in-store execution and advertising to support the Power Brands.

Also, Mondelez plans to offer more good-for-you snacks and expects 50% of its product portfolio to comprise “well-being” items by 2020 instead of the current one-third. Apart from simplifying the ingredients and improving nutritional benefits of the existing products, the company will develop products to meet the growing demand for healthier and natural items.

Stock Price Movement

Mondelez’s shares have lost 5.5% so far this year, compared with the 4.2% decline of its industry. Nonetheless, earnings estimates for 2018 moved up 0.9% over the past 60 days. This signifies that analysts are optimistic about this stock’s near-term performance.

Also, this Zacks Rank #3 (Hold) stock surpassed earnings estimates in three of the trailing four quarters, recording an average positive surprise of 2.96%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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