CAGNY: Mondelēz Looks to Leverage Iconic Brands in Cakes and Pastries Category
Mondelēz International Inc. chair and CEO Dirk Van de Put told the audience at the Consumer Analyst Group of New York (CAGNY) event today that his company has its sights set on long-term growth, with a good plan for weathering the cocoa price headwinds and a spotlight on building out a robust cakes and pastries business leveraged off its current successful brands.
Mondelēz delivered net revenue growth (4.3%) and gross profit (5.1%) in 2024 despite the record costs of cocoa, Van de Put said. Consumers continue to indulge in biscuits, baked snacks and chocolates, he added, and Mondelēz will double down on growing those categories. He feels that the company is well-balanced and well-positioned globally, and that the plan for cakes and pastries is an exciting opportunity for the company.
Mondelēz has seen continued popularity in snacking through its annual “state of” report, with 91% of consumers telling the company they snack daily, and 73% of Millennials saying they cannot live without snacks. More importantly, given the input costs, 71% of those Mondelēz surveyed said they will still snack through any price and pack changes.
Cocoa prices have clearly made an impact, but Van de Put said he is confident Mondelēz will emerge from the crisis in a stronger position. Chocolate is still an attractive and robust category, he said, and volumes are resilient even though prices have been high. Outside the U.S., consumers’ chocolate brand loyalty is important. Mondelēz’s chocolate franchise is still growing in the high single digits, Van de Put said, driven by both global brands (Cadbury and Milka) and local/regional brands as well.
To navigate the high costs of cocoa, Mondelēz has reconfigured pack sizes and prices to better meet consumer needs. It has also focused on marketing and sales execution, offering more support in emerging markets and more innovation and seasonals. The company is keeping watch on pricing, volume, consumer trends and response. It’s also working to reduce overhead and deliver cost savings through the supply chain.
The company continues to ramp up the resilience and stability of the cocoa supply chain, working on risk management, sourcing improvements and farming innovations, and also looking at lab-grown cocoa alternatives.
The cakes and pastries business has Mondelēz genuinely excited to parlay its experience and expertise in biscuits and chocolate into success in a $97 billion global category, which is expected to reach $125 billion by 2030.
Legacy brands, such as Oreo, Milka and Lu, already produce about one-third of the company’s 2024 net revenues in cakes and pastries, with significant growth anticipated for 2025 and beyond. Oreo Cakesters is performing well, Van de Put said, and the company will continue to propel the iconic Oreo brand forward in this category with new flavors and market expansion in 2025. Mondelēz also plans to expand its chocolate brands into this category, with similar ideas in mind for their growth.
To bolster growth in cakes and pastries, Mondelēz plans to expand its 7 Days packaged croissant brand into the U.S. — and then double the business by 2030. In-store bakery, including co-branded products (such as Oreo-branded mini cupcakes), is another growth avenue. Co-branded Oreo products tripled in sales last year, the company noted. Finally, the company is seeing high growth in China in chilled cakes and pastries, and it expects to extend its iconic brands to this segment of the business as well.
