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Mondelez earnings: Supply chain 'all out of whack,' CEO says

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Yahoo Finance's Allie Canal talks Mondelez earnings and taste tests some of the snack giant's latest creations.

Video Transcript

ALEXIS CHRISTOFOROUS: Welcome back, everybody. Shares of Mondelez sinking today after a mixed fourth quarter, thanks to labor shortages, supply constraints, and inflationary pressures, Yahoo Finance's Alexandra Canal here now to break down what this report means for the snack maker. I also know one of its top brands, Oreo, set to release some sweet new products, we can say, to celebrate its 110th birthday. It's hard to believe the Oreo is over a century old.

ALEXANDRA CANAL: I know. I am very excited to try these new products, but let's take a step back and look at these earnings. You're right, the stock for Mondelez, it's down roughly 2 and 1/2% following that mixed bag of earnings that we got yesterday. The big focus here are the kinks that are happening in the global supply chain. The CEO literally saying verbatim everything is out of whack.

The company explained that higher prices were not enough to offset some of those increases in raw materials, ingredients, transportation, coupled with the fact that we have a really bad labor shortage across the sector. Along with the trucking industry, Mondelez also had a deal with a worker strike back in August.

So we're still feeling some of the impact of that. So it's pretty clear that they're going to have to raise prices again. They did raise prices previously. That went into effect this month. They raised them between 5% and 6%. However, those were based off of October price projections, and their expenses has increased since then.

So moral of the story here is we're going to have to see more price increases. They didn't say by how much yet. The CEO explained that it's a really tricky balance. You don't want to raise prices too much or too quickly. They did do that a few years ago in emerging markets. And that sort of came back to bite them. So it's going to be a tricky balance to try and figure that out there. But right now, he says that customers are still buying top brands like Ritz Crackers, and as you mentioned, Oreo.

And speaking of Oreo, one way to try and offset all these hurdles is some new product innovation. Oreo has that covered. They have a new frozen Oreo treat lineup. I have some of those treats here. We have sandwiches. We have bars. We have scoopable ice cream mix. Now all of this, the full lineup will be available in March. But you can still get some of these products at your local grocery store. It was very, very difficult to figure out which one to taste test. But I'm going to try this bar because, you know, I've never really seen a lot of Oreo bars.

Now the thing here is that they say this is different than just plain old cookies and cream. They really want you to taste the Oreo. So I'm going to hold this up. This is the bar. And let's take a big bite. OK. This surprises me. It's like the Oreo cookie cracker around this, which I'm really impressed on how they did that because I thought at first, that was just plain old chocolate. It really does taste like a frozen Oreo.

I can definitely see this being a huge success at birthday parties, big gatherings. Obviously, it's the winter now. In the summer, I think this is going to go off the charts. I would give it a 4.5 out of 5, which, as we know, I'm a very harsh critic, but I think that's a good one.

But you mentioned it's Oreo's 110th birthday. The official birthday is technically March 6. But they're celebrating a little earlier with a new limited edition cookie. It is called the Oreo Chocolate Confetti Cake Cookie. It features rainbow sprinkles both in and on the cookie. Unfortunately, I do not have it with me to try. They're holding out on me, but I will be at stores on Monday when this will officially be at retailers nationwide.

They also brought back the Oreo Cakesters a few weeks ago after a 10-year hiatus. So really, they're leaning in on the nostalgia, leaning in on the new products. Mondelez did say they expect things to get a little better as the supply chain eases up, as those price increases take hold. And of course, it always helps when you have a great brand like Oreo kind of releasing these new frozen treats to get people back in the stores.

ALEXIS CHRISTOFOROUS: All right, thanks a lot, Alexandra. Now do the right thing and share with your family. I know they've been bugging you, wanting to try.