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Mondelez embraces food packaging, unaffected by GLP-1 sales impact

Mondelez embraces food packaging, unaffected by GLP-1 sales impact Mondelez International Food and Beverage Business

Mondelez International, a global snacks, biscuits, and confectionery company, is not concerned about the potential impact of GLP-1 weight-loss drugs, according to CEO Dirk Van de Put. Van de Put believes that the topic has been overblown and is not a big concern for the company at this stage. However, Mondelez is closely monitoring the emergence of these drugs and their impact on the market. The CEO expects a potentially modest impact on volumes, estimated at 0.5% to 1% over the next ten years. Even if the impact is larger, the company believes it will have enough time to adjust and prepare for any changes.

Van de Put also highlighted the company’s focus on portion control and its strategy to offer snacks that are less than 200 calories. Mondelez’s portfolio includes healthier alternatives such as BelVita for breakfast and snack bars that can be meal replacements, which align with the diet of GLP-1 patients.

In terms of pricing, Mondelez is experiencing resilient consumer demand in snacking despite pricing pressures. The company expects pricing to contribute more than an average year, although less important than this year. The inflation rate is projected to be higher than mid-single-digit, potentially reaching 5% to 10%.

Snack bars are a growth area for Mondelez, particularly after acquiring brands like Clif Bar, Grenade, and Perfect Snacks. Combined sales revenue for these brands is expected to exceed $1.2 billion this year. Mondelez sees a significant opportunity in the snack bar market, especially in the US and Anglo-Saxon countries.

In the biscuits category, the company is seeing some softness in North America, mainly among lower-income families who shop in club stores. However, Mondelez is experiencing strong growth through this channel. In Europe, the company’s volumes in biscuits and chocolates are improving, driven by solid elasticities and the resolution of pricing disputes with retailers. Van de Put has a positive outlook for Europe and North America in 2024, as well as emerging markets. However, he noted some shifts in consumer behavior towards smaller packs and discounters in places like France and the UK. Overall, Mondelez feels optimistic about the consumer market in Europe and Australia, while closely monitoring trends in the US and Canada.

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