Snack company withdraws 2020 financial outlook in wake of pandemic,
Net revenues of Mondelez’s North American business were up 15% in first-quarter 2020 from the previous year.
In the United States, Mondelez saw snack sales increase as consumers loaded their pantries. Growth for biscuits, for example, approached 30%, said Dirk Van de Put, Mondelez’s chairman and CEO, on the company’s quarterly earnings call. In the weeks after that, the growth came down to single digits.
Interviews with customers around the world showed people continue to snack more, Van de Put said, and there are several reasons why.
People are spending more time at home due to stay-at-home orders, so there is more grazing and continuous eating happening than normal. Consumers are also eating more cheese, fruit, veggies, biscuits and salted snacks, he said.
Parents are sharing snacks with their children more while at home and experimenting with food, too. Brands such as Fig Newton and Nutter Butter are seeing a 40% increase in new consumers, he said, and Oreo and Ritz are seeing a 15% to 20% increase in new consumers.
“The penetration is going up, and that’s what we currently are seeing,” Van de Put said. “And I believe, as long as we are in this uncertain situation, and as long as we are not having the same out-of-home consumption, our categories, particularly biscuits, but also chocolate, will benefit from that.”
Due to the COVID-19 pandemic, however, visibility is limited in several markets, so Mondelez is withdrawing its full-year outlook.
Throughout the coronavirus crisis, the company’s priority is to protect its colleagues and maintain business continuity in service of its customers and consumers around the world, Van de Put said. Mondelez is also supporting food stability and emergency relief efforts around the world through cash donations and products, donating $20 million to date.
The company’s next priority is supply chain continuity. Mondelez is focusing on the most important products for retailers and consumers to maintain good service levels. It announced in March it would hire 1,000 U.S. employees to help keep the food supply going.
“We are intent on emerging from this crisis even stronger than before. We are accelerating a number of strategic initiatives and continuing to invest in our brands and capabilities to remain the preferred choice of our customers and consumers,” the first-quarter report said.
Mondelez International U.S. is part of Deerfield, Ill.-based Mondelez International, one of the world’s largest snack companies. Its brands include Oreo, belVita, Sour Patch Kids and Trident gum.
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