Mondelez bets big on chocolate, biscuits with early returns buoying year-over-year growth

“If our business would be only biscuits and chocolate, we would see a much stronger top line and we would see a much stronger bottom line, and we think that’s where we gradually have to move towards,”​ CEO Dirk Van de Put told attendees at Barclays Global Consumer Staples Conference in Boston late last week.

He explained the company doesn’t feel the need to exit immediately because “it’s not like the categories that are not core for us … are doing particularly bad.”​ Rather, he said, “we see it more as a gradual balancing act” ​with both exits and acquisitions occurring in the next two to five years.

While the goal is to reshape the company’s portfolio so 90% is focused on core chocolate and biscuits, Van de Put acknowledged that Mondelez will likely remain slightly active in other areas as “that comes from the acquisitions or that is still remaining from our portfolio like we have it today.”

The transition to focus on chocolate and biscuits is already underway with several acquisitions and divestments in recent years expanding the company’s focus in this area from 59% in 2012 to 79% in 2021. Among these were the acquisition of nine businesses worth $2.8b in sales since 2018, including Hu better for you chocolate, Ricolino, Tate’s Bake Shop, Gourmet Food Holdings and others.

The decision to focus on indulgence at a time when buzz around better-for-you and healthy options has been building may seem counterintuitive, but the strategy is already paying off with Mondelez reporting about 6% year-over-year growth for the past three years.

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