Mondelez International Sees Rising Global Snack Demand... "Steady Performance Expected"

[Asia Economy Reporter Park Jihwan] Hi Investment & Securities stated on the 2nd that Mondelez International is expected to continue steady performance growth due to the increasing global demand for snacks.

Researcher Lee Kyung-shin of Hi Investment & Securities evaluated, "The prolonged COVID-19 pandemic has led to an expansion in snack consumption at home globally, driving growth in the snack market." Mondelez, which operates a global snack business, showed that the growth rates for biscuit and chocolate categories in 2019, before COVID-19, were 3.1% and 4.7% year-on-year respectively, but over the following two years, the compound annual growth rates expanded to 4.3% and 6.3%, reflecting the same improvement trend as the market. The researcher forecasted, "Considering the somewhat uncertain external variables, the medium- to short-term growth trend, including this year, is likely to continue."

Outside of North America, the high sales proportion in other global regions is also evaluated as a strength compared to other food and beverage companies. Mondelez not only operates in the North American region but also owns numerous global local brands, making it advantageous for further expanding its presence in the global market compared to other food and beverage companies. The researcher said, "Their rapid response capability, such as launching products tailored to local market needs, stands out," adding, "The strategy to continuously strengthen market dominance is effective."

With high market shares across various categories worldwide, continued external growth is also expected. Mondelez, which inherited Kraft Foods' snack division, operates in multiple categories including biscuits & cookies, chocolate, beverages, gum & candy, and meals. As a result of building a broad product portfolio through mergers and acquisitions (M&A) while repeatedly implementing cost reductions and brand building, Mondelez's global Sweet Snack market share last year is expected to be an overwhelming first place at 11.7%.

Despite external uncertainties, steady operating performance is expected through cost reduction efforts and price increases. The researcher said, "Despite severe external cost pressures such as supply chain disruptions and strikes in the North American region, the market expects annual operating profit to grow by more than 20% last year. In particular, based on a solid product portfolio and pricing power, a 6-7% price increase was announced in the United States, and additional price adjustments in other regions are not burdensome, so operating performance growth is also expected this year amid ongoing inflation concerns.