Mondelēz International Invests In eCommerce, Convenience Growth

As Mondelēz International, Inc. invested in its further growth in non-grocery channels such as eCommerce, discounters and convenience, the confectionary company experienced its first full year under its new consumer-centric growth strategy in 2019. It has also been working on expanding its distribution in fast-growing, developing markets like India, China and Russia.

Chairman and CEO Dirk Van de Put said on a call with analysts covering full-year and fourth-quarter earnings results that the company has become faster and more agile when it comes to innovation. He noted that the company is “trying many new ideas,” and rolling out fewer initiatives, but with more success. In addition, the firm’s North American supply chain showed significant improvement in 2019, while European teams executed against a seasonal opportunity — such as Easter and Christmas — better than in recent years.

The company delivered organic net revenue growth of 4.1 percent in the year, which Van de Put said was widely based throughout geographies and brands, powered by volume and pricing. Emerging market growth was strong, and was driven mainly by important geographies such as Russia, China and India, but also by emerging high-growth markets in Southeast Asia. Van de Put noted that developed markets also displayed robust growth, with North America and Europe performing well, driving category growth and delivering share gains.

Van de Put said that, overall, the results reflect the quality of the company’s portfolio, with its unique combination of both “global and local brands” benefiting from increased growth, as well as targeted investments throughout the year. He also noted that the company made great progress in 2019 in embedding its purpose to “empower people to snack right.” It announced a new sustainable snacking strategy, with new goals and stronger commitments.

The company is looking to make the packaging of all its products 100 percent recyclable by 2025. At the end of 2019, the company was already at 92 percent, with trials underway to unlock the 8 percent that remains. When it comes to the mindful enjoyment of its products, Van de Put noted that the company is committed to increasing its mix of portion-controlled packs to 20 percent of its total revenues. He said the company is well on the road to achieving that goal, with 15 percent already sold in such formats.

Mondelēz International, Inc. reported earnings results that came out ahead of both top- and bottom-line estimates, with net revenues of $6.9 billion and adjusted earnings per share of $.61 in the fourth quarter. Analysts had expected revenues of $6.8 billion and earnings per share of $.60.