Mondelez CFO: 'We have been implementing prices generally across the board in our operations, thoughtfully'
In This Article:
Mondelez International CFO Luca Zaramella sits down with Yahoo Finance's Brian Sozzi, Emily McCormick, and Brooke DiPalma to discuss the snack food and beverage brand's pricing strategy across all products lines, expected labor and supply struggles in 2022, and consumer products focused on well-being.
Video Transcript
- Mondelez says it's seeing a recovery in demand for gum and other candies as mobility picks up around the world, but it's also seeing a good deal of inflation just like other large multinationals and is lifting prices to offset any profit pinch. Mondelez CFO Luca Zaramella joins us now. Yahoo Finance's food reporter, Brooke DiPalma Palma is here as well. Good morning to you both here. Luca, so I'm listening to your earnings call last night, and one thing stood out to me outside of inflation is Oreos. And you had a big target out there on the earnings call looking for the Oreos brand to grow to $1 billion by 2023. How did you get there? And how did Oreos do in the most recent quarter?
LUCA ZARAMELLA: Thank you, Brian. Oreo is doing extremely well across the board. We are very happy. We have tremendous opportunities outside of the two big countries where Oreo is sold, which is the US and China. And those two continue to do extremely well, high single digit growth, so very happy with that. But importantly wherever we invest in Oreo, wherever we put it in front of consumers wherever consumers have the opportunity to buy they buy it and we are very happy. Latin America is a place where Oreo is growing in a terrific manner. Armenia, which is the other region in emerging markets that we have as well and Russia and Europe in general, very happy with the outcomes we see there as well.
- Brooke, I think you're on mute. There you go.
- Apologies up. You noted that the US portfolio could see a price increase of roughly 6% to 7% starting in Q1 of 2022. When can consumers expect to see that spike and what categories can consumers expect to see higher costs?
LUCA ZARAMELLA: So the price is going to go into effect as of January 1st. So I think as as Q1 plays out, they will see but quite honestly we have been somewhat implementing already some pricing. We have been fine tuning our promotional strategies et cetera. I think for consumers though, it is important to notice that as a company we are very thoughtful as we pass price. This is really inflationary pressures that we face across the whole supply chain. And you know, in the end we believe that supporting a brand, making sure the quality is there, and having the right prices is absolutely the right strategy for us. And we have been implementing prices in general across the board in all our operations. We have always done it thoughtfully. We use what we call revenue growth management, which is a sophisticated set of techniques in order for us to be able to pass price in the right way and optimizing consumers value. And we believe this is the right thing, and obviously there is inflationary pressure everywhere. We see it, and we believe also that volume will hold up quite well.