New York — Mondelez International, Inc. is increasing its investments in emerging markets by up to $300 million by 2015, aided by an expected 20 to 30 percent increase in operating income, Chairman and CEO Irene Rosenfeld said.
“Emerging markets are essential to our overall growth aspiration,” Rosenfeld said at the Citi 2013 Global Consumer Conference yesterday. “The race is on for us to secure and expand our positions in these fast-growing markets. Our competitors also find emerging markets attractive, so competition will intensify in the near term. That’s why stepping up our investments now is critical to deliver long-term shareholder value.”
Boosting marketing and trade support behind Power Brands, adding route-to-market and sales capabilities and entering new markets with novel categories, Rosenfeld said Mondelez will increase investments in emerging markets by $100 million this year. Investments are expected to total $200 million in 2014 and $300 million in 2015 and thereafter.
“Our focus is on expanding our positions in snacks — chocolate, biscuits, gum and candy,” Corporate External Communications Senior Director Michael Mitchell tells Candy & Snack TODAY. “Across our categories we're building a robust pipeline of innovations under multiyear platforms that can be leveraged quickly across markets and around the world.”
Mitchell notes the company will increase advertising behind brands such as Oreo in China, Lacta in Brazil, Jacobs in Russia, Cadbury Dairy Milk in India and South Africa and Tan in Asia and the Middle East.
Rosenfeld claims Mondelez plans to pay for these investments by targeting a 500-point improvement on operating income in North America by reinventing its supply chain. In Europe, Rosenfeld says the company will streamline its supply chain and leverage service centers in low-cost areas to increase its operating income by 250 points.
Mondelez reaffirms its 2013 expectations of five to seven percent organic net revenue growth and earnings per share guidance of $1.55 to $1.60, Rosenfeld says.