Wednesday, February 11, 2015

Post doubles down with MOM acquisition

As I get back into winter blogging mode, there is one big cereal story in particular that I must comment on. A couple of weeks ago number three cereal maker, Post, demonstrated that it is not only committed to solidifying its number 3 spot in the cereal industry, but is eyeing the future with growth definitely in mind. They have agreed to buy MOM Brands for $1.15 billion, adding the latter's successful bagged cereals and other varieties to its portfolio.

MOM (formerly Malt-O-Meal) has been a cereal disruptor with its focus on knock-off cereals sold in larger sizes, and often at a lower price than the mainstream boxed cereals. It will now be interesting to see how Post leverages the purchase, either through branding changes and/or manufacturing efficiencies.

Consolidation in the cereal industry is inevitable, especially now with the larger companies struggling to find an edge in a tight market.

(Source: Bloomberg)

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