Milling & Baking News Corporate Profiles - November 2013 - (Page 110)

Company Overview Mondelez International, Inc. 'Power Brands' fuel above-average growth M ondelez International, Inc., Deerfield, Ill., the self-described "global snacking powerhouse" formed after the spin-off of Kraft's North American grocery operations in October 2012, has enjoyed strong sales from some of its many brands, with impressive market share in cookies, snack crackers and chocolate categories. At the same time, the company has struggled to increase efficiencies in its worldwide network of 170 manufacturing plants. Many plants in both Europe and the United States are more than 40 years old. Labor costs also are viewed as excessively high in some locations. Efforts to correct the situation may take until 2020 and are expected to cost as much or more than the company's current operating capacity. One such initiative is construction of a plant in Mexico City that will improve on older plants by being closer to rail transportation, able to run with fewer employees and being built according to stringent environmental standards. The push for supply-chain improvements has been focused on what Mondelez calls its biscuit business, which encompasses both cookies and salty crackers. Mondelez has a strong presence in the category, with brands such as Oreos, Chips Ahoy! and Triscuits. Mondelez said its biscuit brands designated by the company as "Power Brands" take in 65% of total company revenue for cookies and snack crackers. The brands have grown 8% annually, or nearly twice the growth rate of the total company. Mondelez has stated it is the largest world player in the cookie category with a 38% market share. Sales of cookies in general have been a winner, with about 5% annual growth, while Mondelez has been generating about an 8% increase in dollar sales from cookies and 7% increase in unit sales through mid-2013. Irene Rosenfeld, chief executive officer, has called the company's U.S. cookies business "a standout performer." Nine out of 10 new biscuit products introduced domestically in the first half of 2013 were manufactured by Mondelez, Ms. Rosenfeld said. Mondelez's "Power Brand" chocolates, including Toblerone and Cadbury Chief executive officer - Dairy Milk, have a 50% market share worldwide and also have been growing in the range of 8% annually. The company plans expansions in other sectors as well. Mondelez, which positions itself as the world's second largest coffee company, has announced plans to enter two additional international markets: Australia and The Netherlands. Another important initiative for the company is sustainability. Mondelez has plans through its Cocoa Life program to improve livelihoods and living conditions in West African cocoa-farming communities. Wellness is also a priority, and Mondelez has pledged to look at reformulating products to improve their health profile while not sacrificing taste. For the six months ended June 30, net income was $1,184 million, equal to 66c per share on the common stock, down 36% from $1,842 million, or $1.04 per share, in the same period a year ago. Net sales increased 0.8% to $17,339 million from $17,194 million. Operating income fell 8% to $1,699 million from $1,840 million. CP Top brands - Oreos Chips Ahoy! Cadbury 2012 net revenue - Irene Rosenfeld 110 \ November 2013 $35 billion Milling & Baking News * Food Business News * Baking & Snack * Meat & Poultry Corporate Profiles

Table of Contents for the Digital Edition of Milling & Baking News Corporate Profiles - November 2013

Milling & Baking News Corporate Profiles - November 2013