Mondelez CEO Dirk Van de Put continues to prioritize combating inflation

During the Barclays Global Consumer Staples Conference, Dirk Van de Put, the CEO of Mondelez International, revealed that his predominant worry is inflation. When asked about his biggest concerns, he highlighted the ongoing cycle of inflation, stating that although there has been talk of it reducing, he has yet to see these changes. Van de Put pointed out that cocoa prices have risen by over 50% in the past 12 to 24 months. To mitigate the impact, the company plans to implement price adjustments, although not as much as during the current year, while keeping an eye on the potential decrease in sales volumes. Mondelez recently concluded challenging pricing negotiations with European grocery retailers, aiming to maintain their competitiveness in a crowded market.

Another concern raised by Van de Put is Mondelez’s lack of a global supply chain, demonstrated by the challenges faced during events like the conflict in Ukraine. While answering a question during the conference, these remarks were an exception, as the overall discussion was optimistic.

Van de Put emphasized that despite economic challenges, Mondelez’s operating categories have shown resilience, with consumer trends remaining strong. Furthermore, he noted that private-label competition has not significantly increased, despite consumers facing financial constraints in many markets where they operate. Mondelez’s revenue forecast for full-year 2023 has been raised to expect organic net revenue growth of +12% compared to the previous guidance of +10%.

Looking ahead, CFO Luca Zaramella expressed excitement about the potential of the baked snacks market, which Mondelez sees as a natural extension of the biscuit industry. With an estimated worth of $80 billion, growing at the same rate as the biscuit market, this fragmented market offers consolidation opportunities. Zaramella also highlighted the potential for a premium approach within this segment. Additionally, Van de Put discussed the growth prospects of the Oreo biscuit brand, aiming for a 10% market share in every market, after achieving this milestone in the US and China. He projected that the brand’s global value would increase from $4 billion in 2022 to $5 billion in 2023.