Will Standring
Updated ,first published
Soaring global sales of Biscoff cookies are helping a Belgian food company extend a remarkable decade of stock market outperformance.
Lotus Bakeries NV shares are up 49 per cent year-to-date, taking gains in the last decade to nearly 600 per cent. That’s as food and staple stocks have largely struggled on a worldwide scale. The company’s market capitalisation has jumped to around €9.4 billion ($15.5 billion)
Key to the stock’s rise has been the growth of Biscoff. The caramelised biscuits are now in the world’s top five for sales, according to the company’s latest annual report. This year, a “Japanese cheesecake” trend involving Lotus biscuits went viral on TikTok.
“You can compare it to Oreo when that was growing drastically,” Ignacio Canals Polo, an analyst at Bloomberg Intelligence, said in an interview. “People seem to like it everywhere they go. That’s the most important part to understand about Lotus Bakeries.”
Founded in 1932, Lotus Bakeries has been gradually expanding the presence of its flagship Biscoff biscuit globally, including a partnership with US carrier Delta. More recently, the company opened a factory in Thailand in its push to reach Asian markets, and has expanded into areas such as spreads, ice cream and chocolates.
The move into new products and markets has seen revenue skyrocket. Sales jumped an average 17 per cent each year between 2014 and 2024, according to Bloomberg Intelligence, as the brand’s popularity grew worldwide.
“Shareholders have been handsomely rewarded via a combination of dividends and share buybacks,” said Ketan Patel, a fund manager at the family office Whitefriars, which owns Lotus shares — noting that dividends have grown annually for more than two decades.
Lotus Bakeries did not respond to a Bloomberg request for comment.
Analysts are broadly optimistic or neutral on the stock, though its average price target suggests there’s no room for upside over the next 12 months.
It trades at a hefty premium to peers. A multiple of about 46 times expected earnings is more than double the MSCI World Food, Beverage and Tobacco Index, and over 20 per cent more expensive than its own average valuation over the past decade.
BNP Paribas’ Mikheil Omanadze is the only analyst tracked by Bloomberg with a sell-equivalent rating and has been bearish on the stock for more than two years, seeing its valuation premium as excessive. He sees potential challenges stemming from the increased popularity of GLP-1 weight-loss drugs and “ultra-processed food narratives,” which may weigh on valuations by turning consumers away from sweet snacking.
The company has made moves to insulate itself from health-conscious consumer disruption through early M&A action. In 2015, it acquired the Bear, Trek and Nakd brands — all of which have become big names within healthy snacking — as part of its natural-foods division. This now accounts for 25 per cent of its revenue, according to its most recent annual report.
“The challenge for the business will be how to keep on delivering on double-digit growth in a global market that is highly competitive and has low barriers to entry,” said Whitefriars’ Patel. “A mis-step on products, marketing, distribution, technology et cetera could derail the growth story.”
Bloomberg
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