Mondelēz: Chocolate Sales Jump 18% as Consumers Seek Affordable Comforts

Amid consumers’ economic anxieties, Mondelēz is seeing chocolate sales rise significantly.

Chicago-based multinational snack and confectionery giant Mondelēz International, parent company of a wide range of popular brands including Cadbury, Oreo, Ritz, shared in a presentation Thursday (April 27) accompanying its first quarter 2023 financial results that its chocolate business grew 18%.

“Consumers are shopping around to find attractive deals and trading up and down in terms of pack sizes based on their specific needs and consumer occasions,” Mondelēz International Global Chief Financial Officer Luca Zaramella said on a call with analysts discussing these results. “They remain loyal to branded products, particularly in chocolate.”

Indeed, as Zaramella noted, demand for coupons and discounts is high. Research from the March edition of PYMNTS’ Consumer Inflation Sentiment report, “Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers,” which draws from a survey of more than 2,100 U.S. consumers, reveals that 44% of grocery shoppers are deal chasers, willing to go wherever they will get the best price.

Mondelēz’s strong growth in chocolate builds on a 10.5% increase last year and 6.4% the year before, suggesting that demand has accelerated significantly in the past year.

The company does not seem concerned with competition from private-label brands. CEO Dirk Van de Put noted on the call that the company has seen “continued strength and resiliency of our beloved brands and categories even in an inflationary environment.”

The strength of chocolate, which is certainly not a staple food, may be surprising as consumers seek ways to rein in their spending amid inflation. PYMNTS’ study  “Consumer Inflation Sentiment: Inflation Slowly Ebbs, but Consumer Outlook Remains Gloomy,” which draws from a survey of more than 2,100 U.S. consumers, reveals that 70% of consumers are cutting back on nonessential retail spending and 62% on nonessential grocery spending.

However, it seems that the bulk of consumers cost-cutting measures are focused on bigger-ticket purchases. A PYMNTS survey of nearly 4,000 consumers, created in collaboration with LendingClub, finds that the majority of consumers do not expect to spend on leisure travel, new vehicles, expensive clothing, high-priced gifts or other costly items this year.

In fact, those same pressures that are causing consumers to be more conservative in their larger purchases could be driving them to lower-priced comfort items such as chocolate, as Hershey Company CEO Michele Buck observed earlier this year.

“Chocolate and salty snacks rank as two of the top three resilient treats that consumers are not willing to forgo,” Buck said. “Chocolate moments are such a heavily integrated part of consumers’ weekly routines, from rewarding moments to stress relief to self-care, and everything in between, that they indicate they would rather cut back on other expenses to make room for chocolate because they love it so much and it’s affordable.”

Certainly, stress is high. PYMNTS’ study “Consumer Inflation Sentiment: In It For The Long Haul,” for which we surveyed more than 2,300 U.S. adults, found that nearly three-quarters of consumers are very or extremely worried about the country’s economic situation.