Consumer confidence in the United States is mixed, with many shoppers looking for deals when it comes to chocolate, biscuits and baked snacks. That finding contrasts with consumer confidence in Europe, which is stable, and in emerging markets, where it is strong, consumer packaged goods (CPG) company Mondelez International said in a presentation released Tuesday (April 30) in conjunction with the […]
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Consumer confidence in the United States is mixed, with many shoppers looking for deals when it comes to chocolate, biscuits and baked snacks.
That finding contrasts with consumer confidence in Europe, which is stable, and in emerging markets, where it is strong, consumer packaged goods (CPG) company Mondelez International said in a presentation released Tuesday (April 30) in conjunction with the firm’s quarterly earnings call.
Mondelez, whose brands include Cadbury chocolate, Oreo cookies and CLIF baked snacks, operates in more than 150 countries, according to the company’s Tuesday earnings release.
With consumer confidence mixed in the U.S., Mondelez saw volume declines; increased promotional intensity; and a shift to online, club and dollar store channels, according to the presentation.
U.S. consumers are seeing persistent inflation, high interest rates and a loss of Supplemental Nutrition Assistance Program (SNAP) benefits, Dirk Van de Put, chairman and CEO of Mondelez, said during Tuesday’s earnings call.
“Lower-income consumers feel pressured, and we see that pressure weighing on their frequency in the category, especially among brands that skew more to that group,” Van de Put said. Chips Ahoy, for example, is losing some market share to private label products.
In response, Mondelez is becoming “more agile” in terms of promotions around different brands, Van de Put said. For example, it’s deploying more multipacks while also reducing the size of some multipacks.
In Europe, where consumer confidence was stable, Mondelez’s growth slowed but held better than the broader fast-moving consumer goods (FMCG) category, the presentation said. This region also saw higher elasticities and shift to smaller pack sizes.
Van de Put said during the call that for Europe, “we’re hearing increased optimism about the go-forward economic outlook.”
Consumer confidence was strong in emerging markets during the first quarter, and Mondelez saw resilient demand, low elasticities, a growth of premium offers and a continued strong preference for branded products, per the presentation. At the same time, these markets were also sensitive on price points.
“We continue to see momentum in emerging markets, where consumer confidence remains strong and our categories remain resilient,” Van de Put said during the call.
To accelerate its growth in emerging markets, Mondelez added more than 100,000 stores in these markets during the first quarter, according to the presentation. The company reported 8.3% year-over-year revenue growth in emerging markets during the quarter, compared to 1.4% in developed markets and 4.2% overall.
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