He said the business move will enable Bimbo “to participate in the in-store and food service bakery channels.”
Panattiere, which offers a variety of products including puff pastry, sandwich rolls, muffins and soft bread, will be part of Bimbo’s Latin American business, whose net sales rose almost 20% during the fiscal 2016.
Bimbo contributed its Latin American business growth to the “revaluation of most currencies versus the Mexican peso and higher volumes in most countries, notably Peru and Latin Centro division,” according to the conference call.
“There, as throughout the region, we have invested in route efficiency and increased our distribution reach,” Servitje added.
Bimbo's bakery business
According to IRI data that includes the total US multi-outlets with c-store ending December 25, 2016, Bimbo’s fresh bread segment posted total dollar sales of over $2bn with a year-over-year growth rate of 2.7%.
The company’s overall fresh rolls, buns and croissants category saw a 1.9% decline during the same period, while its bakery snack segment experienced a 0.1% increase.
In addition, Bimbo’s pastry, Danish and coffee cakes segment posted a 6.5% sales increase of $2,12m and muffins increased by 13.3% to $2,89m.
Macroeconomic challenges
Servitje acknowledged that Bimbo’s most significant challenges in 2016 were primarily the macroeconomic conditions in two of its key markets, Brazil and Argentina, as well as increased restructuring expenses in both its manufacturing and distribution divisions.
However, he remains optimistic about the company's long-term prospects, “as we’re strategically positioned thanks to our financial flexibility, geographic and portfolio diversification, our brand equity, and ongoing investments in manufacturing and distribution.”
Global frozen bakery market
A recent MarketsandMarkets report shows that global market for frozen bakery products was worth $13bn in 2014, with Europe being the largest market.
BakeryandSnacks has witnessed several food giants starting to tap the category by developing new bakery items. For example, Hostess entered the frozen food market for the first time with Deep Fried Twinkies, and partnered with Nestlé earlier this year to develop frozen snacks.
The high growth of the category, according to MarketsandMarkets, corresponds to the increasing demand for “thaw-and-serve” and “bake-off” products that offer convenience not only to households, but also to retail bakeries, grocery stores and quick-service restaurants.
The market research firm projects the frozen bakery segment to reach $21.2bn by 2020, growing at a CAGR of 8.5% from 2015 to 2020.