Tasty Bite Eatables Ltd ~ acquisition by Mars to help Tasty Bite propel into a new orbit

Executive Summary:

  • Tasty Bite Eatables Ltd (Tasty Bite), manufacturer of ethnic and natural vegetarian packaged and ready to eat/serve (RTS) food products marketed under the “Tasty Bite” brand in United States, Canada, and Australia, is all set to propel into a new orbit, following its acquisition by Mars Foods, a division of Mars Incorporated.
  • The acquisition by Mars is of significance as Mars is the 5th largest Food & Beverage brand globally, marketing confectionery, pet food, and other food products to consumers worldwide.
  • Tasty Bite forte in Indian and Thai vegetarian packaged and RTS food products gels well with Mars Foods’ basket of age-old prominent regional and global brands like Uncle Ben’s, Dolmio, Seeds of Change, among others.
  • With Mars as its parent, Tasty Bite gets instant access to Mars Foods’ vast and well entrenched global marketing network. Given the dominance of Indian population worldwide, a wider reach of well established brands like “Tasty Bite” under the umbrella of Mars Foods could help command a better product placement with wholesalers and retailers thereby providing a big flip to Tasty Bite’s scale of operations. This is, in addition to Mars Confectionery’s distribution network in the Indian markets where Tasty Bite has negligible presence.
    • Mars had adopted a similar strategy for some of its acquired brands like Uncle Ben’s and Dolmio, in the past.
  • Further, Rice & Wheat based products account for a sizable share of Mars Foods’ existing product portfolio. India being the 2nd largest producer of rice and wheat in the world, Mars Foods’ can possible leverage Tasty Bite presence in the region as a sourcing/processing hub.
    • “Upon closing of the acquisition of Tasty Bite, Mars Food will expand our all-natural vegetarian offerings in the US, and leverage Tasty Bite’s strong product development pipeline, flavor expertise, and strategic sourcing of quality ingredients throughout our portfolio,” said Mars Food Global President Fiona Dawson in the news release, post-acquisition.
  • Tasty Bite is also engaged in the manufacture of frozen formed products and sauces which are sold to food chains like Dominos, McDonald, Subway, Burger King, KFC, and Pizza Hut, in India. Mars Foods’ association with these chains in other geographies could potentially aid in garnering more business from them in both domestic and overseas market.
  • Given that the acquisition by Mars Foods was just announced yesterday, and the potential benefits would take 18-24 months to play out, Tasty Bite currently trades on par, if not lower, with other similar businesses like DFM Foods, ADF Foods, and Agro Tech in the Indian market, despite having far superior growth trajectory, earnings profile, and return ratios.

Tasty Bite, now part of Mars, the 5th Largest Food & Beverages Brand in the World ~ there are about 10 companies that virtually control every large food & beverage brand in the world – Mars is 5th largest brand…

The infographic below illustrates the leading F&B brands in the world and the companies that own them.

Img 1

Img 2

  • Tasty Bite is now part of the $35 Billion Mars Incorporated.
  • Mars, together with its subsidiaries, is primarily engaged in the production and sale of confectionery, pet food, and other food products to customers worldwide.
  • It offers chocolate products; confectionery items, such as gums, mints, and hard and chewy candies; pet food products for dogs and cats; other food products, including rice, pre-cooked wheat items, herbs and spices, recipe bases, marinades, mustards, relishes, sauces, pasta meals, cheeses, whole grain mixes, thickeners, soups, gravies, ready-made meals, etc.; and single-serve drinks, including coffees, teas, and hot chocolate drinks.
  • Mars was founded in 1891 and is based in McLean, Virginia with locations in Africa, Asia, Australia, Europe, North America, and South America.

Tasty Bite Aptly Fits into Mars Food’s Product Basket ~ Tasty Bite forte in Indian and Thai vegetarian packaged and RTS food products gels well with Mars Foods’ basket of age-old prominent regional and global brands

  • The slide below illustrates Mars Foods’ basket of brands across the globe.
    • Most of these are age-old regional brands focusing on a particular cuisine in specific geographies.
    • Broadly these products can be categorized into RTS rice/wheat dishes and meals, sauces, and pastas.

Img 3

  • Tasty Bite markets ethnic and natural vegetarian packaged and RTS food products under the “Tasty Bite” brand in United States of America, Canada and Australia.
    • Its product portfolio include variety of RTS Indian Main Course, Thai Main Course, Rice, Asian Noodles, and Sauces.
  • Tasty Bite is also engaged in the manufacture of frozen formed products and sauces which are sold to domestic food chains and processed foods manufacturers.

The Big Opportunity!!

“Tasty Bite is a fast growing Indian/Asian dinner time brand. Upon closing of the acquisition of Tasty Bite, Mars Food will expand our all-natural vegetarian offerings in the US, and leverage Tasty Bite’s strong product development pipeline, flavor expertise, and strategic sourcing of quality ingredients throughout our portfolio,” said Mars Food Global President Fiona Dawson in the news release, post-acquisition.

  • With Mars as its parent, Tasty Bite gets instant access to Mars Foods’ vast and well entrenched global marketing network.
    • Given the dominance of Indian population worldwide, a wider reach of well established brands like “Tasty Bite” under the umbrella of Mars Foods could help command a better product placement with wholesalers and retailers thereby providing a big flip to Tasty Bite’s scale of operations.
    • This is, in addition to Mars Confectionary’s distribution network in the Indian markets where Tasty Bite has negligible presence.
  • Rice & Wheat based products account for a sizable share of Mars Foods’ product portfolio. India being the 2nd largest producer of rice and wheat in the world, Mars Foods’ can possible leverage Tasty Bite presence in the region as a sourcing/processing hub.
  • India has witnessed interesting demographic changes in recent times: a growing number of working women has led to better disposable incomes for families and also exposed them to international travel, thereby increasing their knowledge on the variety of cuisines available across the globe.
    • Mars Foods’ global presence and knowhow of different cuisines will help develop products that can capitalize on this trend.
    • Tasty Bite already has some presence in this space as it already caters to some of the international food chains like Dominos, McDonald, Subway, Burger King, KFC, and Pizza Hut in India.

Snapshot of Operational Performance ~ steady ramp up in both Consumer & Food Service business, over the past 5 years, aided by improving operating margins and return rations with stable working capital management…

Img 4

Valuations ~ Given that the acquisition by Mars Foods was just announced yesterday, and the potential benefits would take 18-24 months to play out, Tasty Bite currently trades at par, if not lower, with other similar businesses like DFM Foods, ADF Foods, and Agro Tech in the Indian market, despite having far superior growth trajectory, earnings profile, and return ratios

Img 5

Advertisements