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Mondelez International CEO Dirk Van de Put has told a US business event that his overriding concern is inflation.

Asked at the Barclays Global Consumer Staples Conference in Boston what kept him awake at night, the Belgian boss of the confectionery and snacking giant said: “The cycle of inflation. There’s lots of talk that inflation is coming down but we don’t quite see that yet.”

He pointed to cocoa prices increasing by more than 50% over the last 12 to 24 months.

Van de Put added: “So we will be taking pricing [action] again, although not as much as this year, and there are concerns that volumes don’t suffer.”

ICE Cocoa second position futures prices (last five years)
ICE Cocoa second position futures prices (last five years). Credit: GlobalData Agribusiness

The Cadbury and Oreo brands owner concluded difficult pricing negotiations with European grocers in July which are keen to keep prices down in a competitive marketplace.

Van de Put told the conference today (6 September) his second concern is Mondelez does not operate a global supply chain and events such as the war in Ukraine have revealed how difficult it can be to take a country-by-country approach.

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By GlobalData

His remarks – admittedly in answer to a question put to him – were the only downbeat notes from the Mondelez boss in what was otherwise a bullish ‘fireside chat’ at the multi-group event.

Van de Put said the categories in which Mondelez operates have remained resilient despite economic headwinds.

“We see the strengths as it relates to consumers and we are not really seeing consumption going down,” he said.

Van de Put also said competition from private-label has not materialised as much as might be expected given consumers are cash-strapped in many of the markets in which it operates.

“Private-label is not increasing that much, by about 1% in biscuits in the last year and by 0.2% in chocolate,” he said. “People keep telling us they want to buy our products.”

In July, Mondelez raised its full-year 2023 revenue forecast. It expects organic net revenue growth of 12% against previous guidance of 10%.

Van de Put told the conference: “We are very positive about the year; we are seeing volume momentum. Pricing has been established so we are seeing margin momentum. We have stock availability and can support brands through advertising.”

In terms of future opportunities, CFO Luca Zaramella told the conference that baked snacks is an area the company is excited about.

“We see it as a natural extension of the biscuit market. It’s an $80bn market and growing at the same speed as the biscuit market. It is very fragmented so there are opportunities to consolidate,” he said.

“We see a big opportunity to bring more of a premium approach to it.”

Meanwhile, Van de Put suggested the signature Oreo biscuit brand – which has a 10% market share in the US and China – has the potential to reach that size in every market.

“It was a $4bn global brand in 2022 and will be $5bn in 2023,” he said.

Last month, Reuters reported Mondelez had expressed interest in potentially acquiring US cake maker Hostess Brands.

According to Reuters, the US-based maker of the Twinkies brand has hired Morgan Stanley to weigh up interest from companies including Mondelez, PepsiCo and Hershey.

Just Food approached PepsiCo, Mondelez, Hershey, General Mills – and Hostess Brands – for comment.

At the time of writing, only Hershey had responded. “It’s our policy not to comment on M&A speculation,” a spokesperson said.