Mondelēz International provides update on long-term growth strategy

May 16, 2022
Mondelēz International announces the evolution of its strategy to accelerate growth and focus its portfolio to generate strong, sustainable shareholder value.

Mondelēz International announced the evolution of its strategy to accelerate growth and focus its portfolio to generate strong, sustainable shareholder value. As a result, the company is updating its long-term algorithm to 3% - 5% organic net revenue growth, up from previous guidance of 3% plus.

Summary

  • Confirms strong long-term growth prospects and competitive advantages as a global snacking leader.
  • Unveils evolution of long-term strategy to accelerate growth and focus portfolio on attractive chocolate, biscuits and baked snacks categories.
  • Updates long-term algorithm to 3% - 5% organic net revenue growth, up from 3%+.
  • Continues portfolio reshaping to accelerate growth and focus.

“Our competitive advantages in the marketplace and focused strategy on global snacking leadership give us great confidence in our ability to sustain strong top- and bottom-line growth for many years to come,” Dirk Van de Put, chairman and chief executive officer, Mondelēz International, said in the announcement. “Building on our category leadership, favorable geographic footprint, and the power of our iconic brands, we are well positioned for stronger growth in the decade ahead.”

The company will continue to prioritize growth, execution and culture as three pillars of its strategy – investing in differentiated marketing and sales capabilities, while strengthening its local-first operating model to further empower employees and promote a growth culture. Recognizing the urgent challenges facing the planet and the communities in which it operates, the company also is elevating sustainability to become a fourth pillar in its long-term growth strategy. By further advancing its Snacking Made Right agenda across a focused set of environmental, social and governance priorities, Mondelēz International aims to help drive positive change at scale – creating long-term value for both the business and its stakeholders. 

Accelerated growth and portfolio focus

Mondelēz International is reshaping its portfolio, with a long-term vision to accelerate growth and generate 90% of revenue in chocolate and biscuits, including baked snacks. Chocolate and biscuits are attractive and historically durable categories in both developed and emerging markets, with significant headroom to increase penetration and per capita consumption.

The company will strengthen its presence in its core categories in major markets by building on existing distribution, expanding in high-growth channels and leveraging its iconic brands to establish multi-category leadership positions.

As it continues to reshape its portfolio, Mondelēz International will drive value through organic growth and targeted acquisitions that expand its presence in chocolate, biscuits and baked snacks by filling geographic gaps and extending into under-represented segments and price tiers. The eight acquisitions Mondelēz International has completed or announced since 2018 add $2 billion in annual revenue and have had an average growth rate in the high single digits.

Additionally, the company announced plans to divest its developed market gum business after completing a strategic review over the past year. The company also disclosed its intention to divest the global Halls business. Mondelēz International will continue to operate other brands and products within its candy business, as well as its emerging market gum business.

Investing in capabilities and culture

To enable its refined growth strategy, Mondelēz International announced significant investments in capabilities and culture – including investing more than $1 billion to become the digital commerce snacks leader. The company aims to deliver 20% of revenues from digital channels by 2030, up from 6% of 2021 revenues. Along with its investments in technology, the company is investing behind future-forward commercial growth capabilities – including integrated agile processes to drive simpler ways of working; expanded commercial excellence training programs; and increased digital learning opportunities.

“Our growth ambition will not be possible without the passion, dedication and commitment of our people – the very best in the consumer packaged goods industry,” Van de Put said in the announcement. “To accelerate our growth and focus, we are taking our talent and culture strategy to the next level – by doubling down on initiatives to advance diversity, equity and inclusion; expanding investment in top talent programs; and rolling out a global, holistic employee well-being program.”

Updating long-term growth algorithm

Mondelēz International is updating its long-term growth algorithm to 3%- 5% organic net revenue growth, up from 3% plus previously, to reflect the evolution of the strategy. The company continues to expect adjusted EPS growth on a constant currency basis in the high single digits and gradually increasing free cash flow of $3 billion plus over the long term.

The company is confident it can accelerate and sustain profitable growth and achieve this refined long-term algorithm as a result of:

  • Increasing portfolio focus on the core of chocolate and biscuits.
  • Taking both organic and inorganic steps to fill geographic white spaces.
  • Expanding distribution in high-growth channels where the company has clear headroom to grow.
  • Increasing presence in under-represented segments and price tiers.
  • Attracting, developing and retaining the best talent in the CPG industry.

“Consistent delivery against our financial commitments, investment in the long-term health of our brands and the capabilities of our people – combined with our key competitive advantages – position us well to create significant value for our stakeholders,” Luca Zaramella, Mondelēz International’s chief financial officer, said in the announcement.

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