Grupo Bimbo continues acquisition strategy despite lower Q1 profit

By Gill Hyslop

- Last updated on GMT

Grupo Bimbo continues acquisition strategy despite lower Q1 profit

Related tags Grupo bimbo Bimbo Ventures Natural Bakery Olyra Foods acquisition Earnings Call

Grupo Bimbo SAB de CV acquired Natural Bakery in Winnipeg, Canada, and made a minority investment in Delaware-based Olyra Foods during its first quarter, which saw net profit down 9.4%, citing the sale of its confectionary business in the same quarter of 2022.

During Bimbo’s first-quarter earnings call, chairman and CEO Daniel Servitje said the Mexican bakery giant had recorded a 4.05 billion pesos ($224m) net profit for the first three months of 2023, while its profit margin shrunk by 80 basis points.

This was mainly attributed to the discontinuation of its confectionery business Ricolino – which it sold to Mondelez International for around $1.3bn last year – but also to the “high inflationary environment and even higher commodity prices than last year.”

Discounting these, Bimbo said its profit would have risen 42% and its margin by 90 basis points. As it was, the company’s revenues climbed 10% to reach 99.56 billion pesos ($5.5bn) for the quarter.

Servitje added Bimbo expects to become more efficient across its supply chain this year and will continue to invest in assets, disclosing the bolt-on of Natural Bakery, which was established in 1957 by Lithuanian immigrants to Canada.

“This company is a one-bakery operation specialising in the production and sales of rye bread, strengthening our health and wellness portfolio,”​ said Servitje.

The Mikalauskas family-owned bakery is known for its basket of rye breads from different parts of Europe – “one of a kind style of rye bread inspired by Canadian life and reflecting the ethnic diversity of Winnipeg”​ – including its Canadian rye, Bavarian rye, Baltic rye, Hanover rye, Old World rye and pumpernickel, as well as 6-grain bread and paska bread, sold across much of western Canada.

Details of the transaction were not disclosed.

Boost for Greek-inspired biscuit maker

Olyra biscuits

Another producer to feel the influence of the ‘world’s largest bakery company’ is US breakfast biscuit maker Olyra Foods, which received a minor investment from Grupo Bimbo’s venture capital arm Bimbo Ventures.

Founded in 2017, Olyra Foods produces biscuits inspired by founder Yannis Varellas’ upbringing on his family’s grain mill in Greece, sold online in in more than 5,000 retail locations across the US.

“Olyra – in a very authentic way – has tapped into a consumer need for more nutritious and delicious breakfast solutions,”​ said Constantino Matouk, VP of Bimbo Ventures.

“We are excited to work with them to help grow the business and expand availability of Olyra’s products to more consumers.”

Added Varellas, “These past few years have been exciting as we’ve worked toward offering consumers new nutritional breakfast options,”​ noting Olyra recently launched filled breakfast biscuits, in Peanut Butter, Almond Butter and Double Chocolate flavours.

“We are looking forward to working with Bimbo Ventures as we continue our growth and expansion into the market.”

Bimbo Ventures was established in 2017 by Grupo Bimbo as an inhouse investment arm to help food startups establish themselves, among them snacks and cereals manufacturer LiveKuna​ in December 2021 and vegan treats brand Rule Breaker​ in February 2021.

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