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Snacking, Streamlined Supply Chain To Drive Mondelez’s Growth

February 18, 2014
by Candy & Snack TODAY

Boca Raton, FL — The $1.2 trillion global opportunity presented by snacks, streamlined supply chain and manufacturing facility operations and focusing on power brands will drive long-term growth for Mondelez International, Inc.

Mondelez Chairman and CEO Irene Rosenfeld reports the company’s snack portfolio has historically grown at a rate of six percent, saying: “Although categories have slowed recently, we expect snack categories will recover, as they are well-aligned with consumers’ needs to fuel our bodies, treat ourselves and boost our minds.”

She adds that as GDP per capita in Brazil, Russia, India and China continues to grow, the consumption of snacks will follow.

The company is also looking to improve adjusted operating income margins for North America and Europe by 500 and 250 basis points, respectively.

To accomplish this, Mondelez is reinventing its supply chain, according to Dave Brearton, executive vice-president and CFO. He reports the company anticipates delivering $3 billion in gross productivity savings, $1.5 billion in net productivity and $1 billion in incremental cash.

Brearton says that to date, the company has streamlined, closed or sold 30 plants, while building cutting-edge plants in Mexico and India and expanding facilities in the Czech Republic, UK and U.S.

“Overhead savings will be a major contributor to margin gains,” he says. “We’re accelerating our cost-reduction efforts by ensuring that our overheads are ‘fit for purpose’ for the size and scope of our company and by adopting zero-based budgeting.”

With this plan in place, Mondelez expects organic net revenue growth at or above category growth, adjusted operating income growth in the high single digits at constant currency and adjusted earnings per-share growth in the double digits.

Mark Clouse, executive vice-president and president, North America, adds: “By focusing on power brands, innovation platforms and our direct store delivery operation, we expect to deliver sustainable growth and outpace our competitors. And through better cost management and the reinvention of our supply chain, we’ll significantly expand our margins to bring us in line with our peers.”  

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