Oreo-maker Mondelēz wants a slice of the $97B cakes and pastries space

Mondelēz International wants to take a bigger bite out of the fast-growing $97 billion global cakes and pastries space in an effort to shake up a sector that has become “a bit dull,” according to the CEO of the cookie and chocolate giant.

The snacks maker is leveraging its stable of iconic household brands, including Oreo cookies and Milka chocolate, to carve out a premium presence among a sea of commoditized cupcakes, brownies and muffins.

“It's a natural extension for us. That's the beauty of it,” Dirk Van de Put, Mondelēz’s CEO, told Food Dive in an interview. “It's almost like there were $97 billion of opportunities sitting there, and we were not paying enough attention to it. We see ourselves taking a big role in this category.”

Mondelēz is already a major player in cakes and pastries, with sales in the category topping $2 billion last year. Van de Put expects to more than double sales by 2030 as he brings the company’s biscuit and chocolate brands deeper into the segment while adding new offerings and technological capabilities through acquisitions.

The top five packaged manufacturers of cakes and pastries account for about 18% of the global market, with thousands of smaller companies responsible for the rest. Mondelez is already the third-largest player in the space with 3.8% market share, nearly double its 2021 total.

Growth in the broader cakes and pastries market has accelerated during the last four years, posting a compound annual growth rate of 8.2%, compared to 5.2% between 2015 and 2024, according to Euromonitor data cited by Mondelēz. It’s forecast to become a $125 billion global market by 2030.

Van de Put said consumers are drawn to cakes and pastries due to a recent uptick in innovation, a growing appetite for indulgence and the portable nature of the treats. They’ve also proven to be more enticing to children as a snacking option compared to cookies and crackers.

For Mondelēz, its core cookie and cracker business has similarities with cakes and pastries that makes the move into the sector nearly seamless. The two categories often use the same production technologies and ingredients. 

Mondelēz also can tap into the existing brand equity of a Milka chocolate bar or Oreo cookie, using the names to offer a more premium option in the bakery section. Van de Put told analysts that its portfolio of iconic brands, combined with recent acquisitions, gives Mondelēz “a critical competitive advantage” over its competitors. 

“We see the chance to really bring the market together, to consolidate the market through acquisitions and new launches, bring in a more premiumized, much better product in there, and sort of upgrade the whole market,” he said.

One of the company’s biggest successes so far has come with Oreo Cakesters soft snack cakes, which generated $125 million in revenue during the last year. The snacking giant, with $36 billion in annual revenue, also extended the popular cookie brand into cupcakes following the purchase of a majority interest in Give & Go, a manufacturer of frozen-to-fresh brownies, cookies and cupcakes in North America.

Similarly, Mondelēz has moved Milka chocolate into brownies and croissants, using technology it acquired through the 2021 purchase of snacking brand 7Days.

Currently, a third of Mondelēz’s cakes and pastries business comes from extending legacy brands in its portfolio. The rest is through recent acquisitions, including Give & Go and Evirth, a China-based, frozen-to-chilled cakes company Mondelēz purchased a majority stake in last September.

“The cakes and pastries category is sometimes underestimated because, from our perspective, it's not just an adjacency. It's a core category,” Van de Put told analysts, noting the sector has better margins and is growing as fast as other snacking categories. “We have the impression that maybe there was not enough clarity around how big cakes and pastries can be for us.”

Brittany Quatrochi, an analyst with Edward Jones, said cakes and pastries “make a lot of sense” for Mondelēz and that the company has laid “out a very good case” for building a bigger presence in the category.

“You're really starting to see some of the little moves that they made turn into something a little bit more powerful,” Quatrochi said. “It may not be a key driver of the business today, but there is a world where five to 10 years down the line, that could be a big component of the growth that they're seeing.”