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Brand growth and currency drive 21% hike in Grupo Bimbo North America sales

Vince Bamford

By Vince Bamford+

27-Apr-2016
Last updated on 27-Apr-2016 at 14:14 GMT2016-04-27T14:14:32Z

Sales of many of its US brands increased, reported the bakery giant
Sales of many of its US brands increased, reported the bakery giant

Increased marketing investment and more effective promotional activity has helped drive a 21% year-on-year hike in net sales of Grupo Bimbo’s North American business.

Announcing its results for the first quarter of 2016, the bakery giant reported North America sales of $1.7bn (Mex $30.2bn), up from $1.4bn (Mex $24.9bn) in the same period the previous year.

Grupo Bimbo said the division had benefited from the exchange rate and the growth of brands including Thomas', Sara Lee, Little Bites, Ball Park, Nature's Harvest, Dempster's and Barcel. The performance reflected greater investment in marketing and more efficient promotional activity, it added.

Positive trend in North America

Recent product releases have also grown sales in the North American market, which has begun to show a positive trend, said the company, although it added that growth in fresh bread, snacks, pastries, flatbreads and frozen bread were offset by pressure in premium private label.

Competition from private label players has resulted in a competitive trading environment in the Spanish market in the past quarter, reported the company. Despite this, net sales from the European division rose 13.3% to $0.1bn (Mex $2.0bn), driven by the benefits of the exchange rate.

Grupo Bimbo reported total group net sales growth of 13.2% in the first quarter to $3.2bn (Mex $56.6bn), which it said reflected the exchange rate and strong growth organic in Mexico and Latin America. Operating income increased 50.6%, it said, as a result of lower restructuring expenses and property sales.

Distribution gains in Mexico

In its Mexico business, net sales rose 5.9% to $1.1bn (Mex $19.9bn), with strong volume performance following expansion and distribution growth in all channels and in categories including  pastries, bread, biscuits, confectionery and savory snacks. The company added this had been partially offset by continued pressure on the sweet bread category.

Despite challenging economic conditions and currencies in some markets in the region, Latin American net sales increased 4.8% to $0.4bn (Mex $6.1bn), reported the business, adding performance had been particularly strong in Brazil, Peru and Central America. Growth in tortillas and new snacking products had contributed to this.

Grupo Bimbo last week announced it was acquiring General Mills’ bakery and foodservice business in Argentina. The operation’s product portfolio includes breads, pastries, small baked goods and medialunas, the Argentinian version of croissants. Grupo Bimbo said it would complement the supply of frozen bread it already manufactures under the Bertrand brand. 

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