Mondelez sees opportunity in 'power brands,' e-commerce

by Jeff Gelski
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Mondelez e-commerce
Mondelez is building an e-commerce snacks business by investing in capabilities and infrastructure and enhancing its on-line product assortment.

BOCA RATON, FLA. — New channels like e-commerce and what the company calls its “power brands” represent growth opportunities for Mondelez International.

Irene Rosenfeld, Mondelez
Irene Rosenfeld, chairman and c.e.o. of Mondelez

“We’re experiencing dramatic changes within our industry,” said Irene Rosenfeld, chairman and chief executive officer, on Feb. 21 at the Consumer Analyst Group of New York conference in Boca Raton. “This is causing significant shifts in the drivers of our business – consumer, customers and channels – that are redefining the way our customers eat, live and shop. We’re constantly evaluating all aspects of our business and working to capitalize on these shifts to maintain our leadership in the snacking industry over the long term.”

Mondelez International, based in East Hanover, N.J., is improving its presence in high-growth channels like e-commerce, discounters, convenience stores and traditional trade. Mondelez is building an e-commerce snacks business by investing in capabilities and infrastructure and enhancing its on-line product assortment. Net revenues in e-commerce grew more than 35% in 2016.

Mondelez power brands: Oreo, Milka, belVita
Some of Mondelez's power brands include Oreo, Milka and belVita.

Also at CAGNY, Tim Cofer, chief growth officer for Mondelez, detailed the company’s strategy to accelerate revenue growth. 

“Our strategy to distort investment behind our power brands, which represent nearly 70% of our global revenues, is paying off,” he said. “In 2016, these brands grew organic net revenue at twice the rate of the company overall and continue to outpace category growth.”

Some of the power brands include Oreo, Milka and belVita.

The company also is expanding into new markets such as entering the U.S. and China chocolate markets last year.

Mondelez Milka in China
Mondelez expanded its Milka brand into China last year.

Ms. Rosenfeld added the company has a balanced strategy for both top-line and bottom-line growth to deliver shareholder returns. She said the company’s three-pronged strategy is to focus its portfolio, reduce costs and invest for growth to drive long-term sustainable growth.

“We’re one of the few industry players well-positioned to deliver sustainable growth on both the top and bottom lines,” she said. “We start from a position of strength with the brands, platforms and capabilities that will create value for our shareholders.”

Mondelez International during the CAGNY presentation estimated 2017 free cash flow of about $2 billion and reaffirmed other 2017 outlooks, including organic net revenue growth of at least 1% and double-digit adjusted earnings-per-share growth on a constant-currency basis. 
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