Mondelez's (MDLZ) Latest Innovation Focuses on Key Categories
Mondelez International, Inc. MDLZ has proven its dedication to strengthening its core chocolate and biscuit categories time and again through prudent acquisitions, divestitures and relevant innovation. The company is taking steps to develop one of its most loved chocolate brands, Toblerone, with groundbreaking formats in core markets, thereby concretizing its new brand signature “Never Square.”
The company’s Toblerone brand is reinforcing the latest positioning with substantial investments in top-tier product offerings, effective marketing and promotional efforts and an extended distribution network. The brand’s revamped style includes new premium offerings like Toblerone Truffles, Tiny Toblerone and other gifting options.
Given the burgeoning demand for premium chocolates, the company is intensifying its efforts in this market segment by introducing an array of new Toblerone products.
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Fueling Core Categories
The company’s core categories — chocolates and biscuits — have historically depicted resilience to economic downturns and pricing actions. Consumers in developed countries consider chocolates and biscuits as affordable indulgences and one of the most-valued snacking products. Both these categories registered double-digit growth in the second quarter.
Management is focused on expanding these categories and expects solid volume momentum for both these categories as it moves forward in 2023. The company has undertaken several acquisitions in this regard. The acquisition of Ricolino (completed in the third quarter of 2023) is expected to double the size of MDLZ's Mexican operations, and the purchase of Clif Bar (in August 2022) has bolstered the company's market presence. These acquisitions made meaningful contributions to net revenues in the second quarter of 2023.
Additionally, the integration of Chipita S.A. and Grenade (in 2022) underscores Mondelez's commitment to expanding its product offerings. The company's acquisition spree, further underlined by Gourmet Food Holdings and Hu Master Holdings, has diversified its portfolio and enhanced its distribution capabilities.
Meanwhile, Mondelez is committed to increasing its focus on areas with higher growth potential through meaningful divestitures. On Oct 2, the company concluded the divestiture of its developed-market gum business in the United States, Canada and Europe (excluding Portugal) to Perfetti Van Melle Group. The divestiture marks another step toward MDLZ’s commitment to strengthening its core categories, including chocolates, biscuits and baked snacks.
Mondelez aims to generate 90% of its revenues from these core categories. Shares of this Zacks Rank #3 (Hold) company have rallied 14.6% in the past year against the industry’s decline of 7.5%.
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