Focusing in on its core bakery business has helped boost Grupo Bimbo in the second quarter of the year, as the group saw net sales rise 18.1% in the period.
Revenue rose to 96.4 billion pesos (€4.59 billion) in the period to 30 June 2022, while net profit rose to 6.1 billion pesos (€290 million).
Streamlining The Business
The group recently decided to shed some of its confectionery brands, committing to a long-term focus on core categories, such as grain-based foods – a move that has reaped benefits, according to Amira Freyer-Elgendy, consumer analyst at GlobalData.
"The company's core categories are highly exposed to inflationary pressures and competition from private label but Grupo Bimbo’s pricing strategies, productivity initiatives and category/product mix have supported its performance," she wrote.
In North America, which accounts for more than half of the group's net sales (and which saw a 13.5% decline in 2021 due to tough comparatives), the group reported a "strong" performance, Freyer-Elgendy said, driven by bread and snack performance, as well as increased at-home consumption occasions.
At the same time, while private-label offerings are likely to become a bigger threat to brands this year, "in America 27% of shoppers typically choose foreign/global multi-national brands in the bakery, cereals, morning goods category, versus the global average of 25%, somewhat safeguarding its performance in this region."
Grupo Bimbo is in the middle of a restructuring phase, selling off some parts of its business and boosting its presence in others – it recently acquired Medina del Campo in Spain and Aryzta do Brazil in Brazil, "strengthening its portfolio in this category and helping the performance this quarter," said Freyer-Elgendy.
At the same time, it is expected to drop out of the top five confectionery brands in its native Mexico, following its sale of Ricolino to Mondelēz International in late April, "but the move shows how the company is streamlining its category focus," she added.