Cadbury parent Mondelez International missed expectations for second-quarter revenue, as announced on Tuesday (30), as budget-conscious customers opted for lower-priced alternatives amid sticky inflation.
While consumer packaged goods companies like Mondelez International, Hershey have beefed up prices to counter higher costs of raw materials such as cocoa and sugar, demand for their products faltered.
Mondelez’s sales volumes dropped as lower-income consumers preferred cheaper private label brands over its more expensive products including Chip Ahoy! and Oreo cookies. The company’s quarterly volumes fell 2.2 percentage points, while its prices were up 4.7 percentage points.
Net sales decreased 1.9 per cent across the group to £6.4bn and were down 1.8 per cent in Europe to £2.1bn.
Despite the hit to sales for the Oreo and Ritz crackers maker, Mondelēz chair and chief executive Dirk Van de Put said the company is “well positioned for the second half of the year with the completion of European pricing, the addition of new value offerings in the US and significant distribution runway across key emerging markets.
“Our teams remain focused on delivering our long-term growth agenda while remaining agile in this dynamic operating environment.”
The company expects organic net revenue growth to be at the upper end of 3 per cent- 5 per cent for full-year 2024.
Van de Put added, “We are well positioned for the second half of the year with the completion of European pricing, the addition of new value offerings in the US and significant distribution runway across key emerging markets. Our teams remain focused on delivering our long-term growth agenda while remaining agile in this dynamic operating environment.”
