Mondelez International (NASDAQ:MDLZ) used its presentation at the CAGNY conference to outline what executives described as a strengthened foundation for delivering the company’s long-term growth targets, while addressing recent performance pressures tied largely to unprecedented cocoa cost inflation. Chief Executive Dirk Van de Put and CFO Luca Zaramella detailed strategic priorities across developed markets—particularly U.S. biscuits and European chocolate—alongside continued investment behind emerging markets growth and an update on cash generation and capital allocation.
Company-wide strategy and long-term targets
Van de Put said recent years have been impacted by “unprecedented cocoa input cost inflation,” with pricing creating “very challenging headwinds.” Despite those conditions, he said the company delivered solid top-line growth and free cash flow over the past three years while continuing to invest in the business.
He also reiterated Mondelez’s long-term financial algorithm, including:
- 3% to 5% organic net revenue growth
- Reinvesting roughly half of gross profit growth back into the business
- High single-digit adjusted EPS growth
- More than $3 billion in free cash flow
Van de Put cited consumer research indicating growing daily snack occasions (more than 3.5 per day on average), and said core snacks categories are continuing to grow faster than other food categories. He also highlighted the company’s global positions across biscuits, chocolate, cakes and pastries, and snack bars, along with brand equity strength led by Oreo and Cadbury.
North America: addressing shifting consumer behavior in U.S. biscuits
Van de Put said the North American business delivered about a 4% revenue CAGR over the past five years and generated about $11 billion of net revenue in 2025. U.S. biscuits represent about 63% of the region’s revenue, with Mondelez holding about 42% share, anchored by Oreo, which he said generated about $2 billion in net revenue.
He said household penetration remains high (94% for the biscuit category and 82% for Mondelez), but purchase frequency has declined slightly as prices rose and spendable income stayed flat. The company pointed to six trends it aims to address: flat basket sizes, unease with prices, channel shifts toward value, demand for premium options among higher-income consumers, growth in health-conscious/functional snacks, and increased on-the-go consumption.
Initiatives discussed included increasing investment to boost share of voice and in-store activation, reconfiguring price-pack architecture, expanding sub-$3 “stack packs” to more brands, and a supply chain improvement program to optimize costs. Mondelez said it is investing to expand distribution in club, value, convenience, and eCommerce while increasing capacity for value packs.
On premium and “better-for-you” segments, the company highlighted Tate’s Bake Shop, Oreo Thins, the planned launch of Sargento Cheese Bakes by Nabisco, Oreo Zero Sugar, Oreo Gluten Free, GOOD THiNS crackers, and belVita. It also pointed to expansion in protein bars under Perfect Bar, Builders, and ZBar, which management said are already producing double-digit growth.
To support these platforms, Mondelez described a multi-year U.S. biscuits supply chain capability improvement program aimed at boosting capacity, modernizing packaging and route-to-market capabilities, improving flexibility, and optimizing working capital and customer service. Management said benefits are expected to begin in early 2027. Van de Put added the company is “already starting to see the first effects,” citing strong growth over the last three months in its largest mass retail partner and in value chains.
Europe: recalibrating chocolate amid cocoa-driven disruption
Mondelez said its European business delivered about 8% growth over the past five years and generated about $15 billion in 2025 net revenue, with the company holding about 20% share and the number one snacking position in Europe. Chocolate accounts for about half of the European business, anchored by Cadbury and Milka at roughly $3 billion in net revenue each.
Van de Put described chocolate as a “great category” with “volume resiliency,” but said record cocoa inflation created challenges. He cited greater-than-expected short-term volume impacts from cocoa-led pricing and pack resizing (with elasticity described as an acceptable 0.7), unfavorable pricing tactics from companies less dependent on cocoa in 2025, elevated volume declines in select segments and geographies, and some price-pack innovations that did not fully meet consumer expectations.
To address these issues, management outlined five actions: hitting key price points while improving brand connection, broadening offerings across chocolate segments, scaling premium chocolate, expanding presence in under-indexed channels (including away-from-home), and strengthening cocoa supply chain resilience. Examples included expanding co-branded offerings tied to the company’s partnership with Lotus Bakeries’ Biscoff brand, investing in formats with reduced cocoa content, and continued growth in adjacencies such as Choco Bakery and cakes and pastries, including Milka croissant. Van de Put said the Milka croissant helped deliver about one point of share gain in Europe cakes and pastries.
On premium, management emphasized Toblerone and said it recently ranked number one in the Advantage survey across travel retail categories. Mondelez also discussed investments to improve crop forecasting, expand sourcing regions (including Latin America), scale best practices in West Africa, enhance processing efficiency, and pursue early-stage alternatives such as cell-cultured and fermented cocoa and plant-based options.
Van de Put noted that cocoa prices had fallen rapidly in recent weeks on the prospect of oversupply, which could create near-term discrepancies between industry coverage and market prices. He said that dynamic could force price reinvestment ahead of pipeline costs to respond to competitive actions or customer disruption, while expressing confidence that longer-term stabilization would support normalized category health and profitability.
Emerging markets: volume-led growth priorities and top-market playbooks
Zaramella described emerging markets as a “$15 billion+ business” and said total snacking in those markets is a $350 billion opportunity expected to reach $530 billion by 2030. He said emerging market growth is expected to continue outpacing developed markets, citing a projected 9% compound annual growth rate over the next five years supported by disposable income growth, demographics, and urbanization.
He said Mondelez expects “volume-led growth in the mid- to high-single-digit” and identified China, India, Brazil, and Mexico—about $7 billion of revenue combined—as key scale markets. In China, Zaramella said Mondelez is a $2 billion business with Oreo at about 18% share in biscuits, and outlined initiatives focused on broader physical distribution, strengthening social and quick commerce, and scaling cakes and pastries through the Evirth acquisition with an ambition to reach $1 billion in cakes and pastries revenue by 2030. In India, he said Mondelez is a $1.7 billion market supported by four manufacturing facilities and reach to about 4.5 million stores, with plans to expand route-to-market coverage and add 100,000 stores per year using analytics and machine learning, alongside growth in biscuits and chocolate.
In Brazil, Zaramella highlighted a $1.8 billion business with leadership in chocolate (Lacta) and opportunities to expand price points and occasions. In Mexico, he pointed to growth plans following the addition of the Ricolino business, including Oreo expansion, building a scaled chocolate platform, and strengthening traditional trade presence.
Cash generation, capital allocation, and outlook
Zaramella said cocoa inflation pressured 2025 free cash flow but the company still delivered “strong results,” and stated a target of “$4 billion+” in free cash flow generation going forward as growth initiatives progress and inventory is streamlined. He said Mondelez continues to prioritize returning capital to shareholders, citing double-digit dividend growth in nine of the last 10 years, approximately $15 billion in share repurchases, and more than $30 billion returned over the last eight years.
He also pointed to bolt-on acquisitions as a key pillar, noting 10 deals since 2018 and highlighting growth rates post-acquisition for several businesses, including Chipita, Give & Go, Tate, Perfect Snacks, and Evirth. Zaramella said the company remains focused on maintaining a strong balance sheet.
On the near-term outlook, Zaramella said there was “no change” to the company’s 2026 outlook from what was discussed two weeks earlier, and said the company is optimistic for 2027 with strong EPS growth driven by improved developed market performance, continued emerging market growth, productivity across supply chain and SG&A, and continued stabilization of cocoa.
About Mondelez International (NASDAQ:MDLZ)
Mondelez International is a global snacks company headquartered in Chicago, Illinois, formed in 2012 when Kraft Foods split to create a business focused on snack foods and a separate North American grocery company. Mondelez develops, manufactures, markets and distributes a broad portfolio of snack products intended for retail, foodservice and e‑commerce channels around the world.
The company’s product mix centers on biscuits and cookies, chocolate and confectionery, gum and candy, and savory crackers and baked snacks.
