KRAFT'S RECENT $16.7 billion proposal to buy Cadbury, the British chocolate maker, is just the latest sign of candy and comfort food's appeal during hard times. While most of the economy suffered last year, candy sales were up. And Mars' $23 billion purchase of the gum maker Wrigley was a bright spot in an otherwise sour year for dealmaking. So what food companies might be in play next? Analysts say a combination of Campbell's Soup and Heinz makes sense. Or as they say in the food biz, "M'm! M'm! Good!"
40 PERCENT is how much Cadbury shares have jumped since Kraft's offer, partly on the hope that other bidders will emerge. So far, none have. Nestlé has signaled that it is not interested, and Hershey is unlikely to bid.
3.2 PERCENT is the amount U.S. candy sales have increased in the past year, according to the National Confectioners Association. During hard times people eat more candy. After all, Hershey thrived during the Great Depression, and the 1930s gave us an array of new sweets, including Tootsie Pops, Snickers, and Mars bars.
25 CENTS was roughly the price of raw sugar per pound on Sept. 1--a 28-year high. The spike is a result of increased consumption, lower production in India, and Brazil's sugar crop being partially diverted to cane-based ethanol. Cadbury has weathered the crisis better than some of its peers. Its margins are up 145 basis points in the first six months of the year, largely because of cost cuts. But any stumbles could make it more vulnerable to Kraft's advances.
KRAFT'S SNACK ATTACK
WITH CADBURY IN PLAY, A CANDY WAR MAY BE COMING.
