Mondelez International: Inside the Cocoa Crisis—And the Strategy That Could Beat It!

Mondelez International’s third-quarter earnings call presented a mixed bag of outcomes, reflecting both challenges and strategic moves aimed at navigating the current economic landscape. The company highlighted key areas of focus and concern in its performance across different regions, particularly in Europe and North America, with implications affecting both short-term operations and long-term strategy. In Europe, Mondelez experienced stable consumer confidence, yet faced significant challenges in its chocolate segment. A notable influence was the substantial 30% price increase necessitated by rising cocoa costs, which led to higher-than-anticipated elasticity levels of around 0.7 to 0.8. This was above the historical expectation of 0.4 to 0.5, indicating less favorable consumer demand response to price hikes. Market-specific pressures included competitive dynamics where private competitors did not follow similar price increases and retailers taking higher margins.