Packaged foods company DDC Enterprise (NYSEMKT:DDC) soared more than 300% earlier on Wednesday before slightly paring back some of the gains this afternoon. Better known by its brand name DayDayCook, the entity just announced that it acquired Asian food brand Omsom. Subsequently, DDC stock is up on the positive implications.
According to DayDayCook’s press release, the acquisition stemmed from a combination of cash and equity shares paid out over a four-year period. The buyout should help accelerate “new product innovation” for Omsom. In particular, research and development should see its time “from idea to aisle” cut in half.
Per the press release:
“Operational synergies between the two companies will also streamline processes and improve financial metrics. Further, the two companies share a mission and vision, and together with DDC’s expanding portfolio, are poised to become a leading force in the Asian food industry.”
DDC Stock Could Piggyback Off Interest in International Flavors
“We are delighted to welcome Omsom to DayDayCook. Founders Vanessa and Kim are passionate about Asian cuisine and have created a bold brand that brings genuine flavors right into the homes of consumers,” founder Norma Chu said about the deal.
Further, Omsom CEO and co-founder Vanessa Pham emphasized the importance of both the business and cultural impact of the acquisition:
“We are thrilled that Omsom, which has been built brick-by-brick with heart and intention, will continue to thrive in partnership with DayDayCook. Omsom has relentlessly centered the multitudes within Asian America – so it’s only fitting that we accelerate our next chapter with another Asian woman-founded and -led business.”
Fundamentally, the statements supporting DDC stock align with market data. According to Grand View Research, the global ethnic food market size reached a valuation of $39.5 billion in 2021. What’s more, by 2028, the sector could be worth $70.8 billion, implying a compound annual growth rate (CAGR) of 8.7%. Undergirding the forecast is simply consumer demand:
“Consumers’ growing interest in Asian cuisines globally, for example, Chinese and Japanese, is leading to the rise in demand for ethnic foods. The growing migration of Asian people to developed nations is also propelling the market growth. Furthermore, the rising millennial population which is always in search of exotic experiences is increasingly positive to adopt new ingredients and flavors in their food palate.”
Of course, DDC stock remains risky. In the past year, shares have lost over 70% of equity value. However, with The Food Institute noting that Asian food in particular is “winning over” U.S. consumers, DDC potentially has a massive total addressable market.
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On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
