Baking & Snack - October 2021 - 12

Hostess in 'enviable spot'
for M&A
Lenexa, Kan.-based Hostess Brands Inc.'s confidence in its investment
in organic growth as well as its ability to create value puts the
company in an " enviable spot " for merger and acquisition activity,
said Andrew P. Callahan, president and chief executive officer.
" If M&A is not there at the right price and right value, we'll
take those dollars, and we'll invest it in different ways, " Mr.
Callahan said during a Sept. 9 presentation at the Barclays
Global Consumer Staples Conference. " So that puts us in a
very good position in the sense we don't need to be irrational
around M&A. "
Mr. Callahan said Hostess' size can prove challenging when
competing against larger companies for potential acquisition targets
but is advantageous in other instances, such as the recently
completed Voortman transaction.
" They (Voortman) have a defendable consumer position that
we think is in a subsegment that's going to continue to grow and
is scalable over time, " he said. " That's meaningful to us but maybe
too small for some of the others. So we believe there's a really good
opportunity for us to find a sweet spot within there.
" Certainly, multiples are high, but multiples are relevant to
the mathematics. If synergies can be higher or you can grow
it, multiples are all relative. And we've demonstrated our discipline
with Voortman in that regard as well, and we're always
looking at it. "
Finally, Mr. Callahan said Hostess' ability to scale extends beyond
just baked foods.
" It's a macro snacking platform that we believe that our capabilities
both on building brands, leveraging our broad-based
distribution and our lean operating model enables us to look at
a broader space beyond just sweet baked goods into the broader
snacking universe, " he said. " So we'll be disciplined, but there
will be targets out there at the right price, at the right time. "
- Eric Schroeder, Milling & Baking News
PepsiCo commits to
sustainability
PepsiCo Inc., Purchase, NY, recently announced several sustainability
commitments, including embracing regenerative agriculture,
reducing virgin plastic use, further evolving its food and
beverage portfolio by incorporating more diverse ingredients,
and accelerating the reduction of added sugars and sodium in its
products. Branded as Pep+, the company hopes to achieve many
of its goals by the end of the decade.
" Pep+ will change our brands and how they win in the market, "
said Ramon Laguarta, chairman and chief executive officer. " For
example, imagine Lay's will start with a potato grown sustainably
on a regenerative field, and then be cooked and delivered from a
net-zero and net water positive supply chain, sold in a bio-compostable
bag, with the lowest sodium levels in the market.
" That's a positive choice. That's the best-tasting, No. 1 potato
chip of the future. That's how Pep+ will be better for people, for
the planet and for our business. Now, imagine the scale and impact
when applied to all 23 of our billion-dollar brands. "
Three pillars will support the sustainability program, according
to the company, including positive agriculture, positive value
chain and positive choices. Positive agriculture will require
spreading regenerative agriculture practices to land mass equal
to the company's agricultural footprint, which is approximately
7 million acres.
Through the positive value chain pillar PepsiCo expects to
achieve net-zero emissions by 2040 and become net water positive
by 2030. The pillar also includes a new goal to reduce virgin plastic
per serving by 50% across PepsiCo's global food and beverage
portfolio by 2030. In the United States, all Pepsi-branded products
will be converted to 100% rPET bottles by 2030, with Pepsi Zero
Sugar beginning to be sold in the containers by 2022.
- Keith Nunes, Food Business News
12 Baking & Snack October 2021 / www.bakingbusiness.com
http://www.bakingbusiness.com
Baking & Snack - October 2021

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