Mondelēz hints cocoa cost positivity as it hikes product prices

Poor cocoa harvests in Africa due bad weather impacting growing conditions were a factor in hiked cocoa prices last year and into 2024​.

Consumers worldwide were frustrated by price inflation, but Europeans were more understanding and less likely to leave the category over increasing prices, Mondelēz CEO Dirk Van de Put said in an interview at the Barclays Global Consumer Staples conference this week.

There was “more optimism” around higher prices in Europe as consumers had “good wage increases” alongside easing inflation. “Overall, the consumer feeling [in Europe] is good”, he said.

A good second half to Mondelēz’s financial year was expected, with new pricing in the market rolled out a month ago already showing positive results. Additional mechanisms would also be put in place soon to deliver further sales, including the launch of “new items at different price points” rather than general line price increases.

Will Mondelēz increase chocolate prices?

Line price increases would occur, but in steps to ensure consumers reacted in the “right way”, he continued. “Most consumers don’t want to give up chocolate on a regular basis[…] it’s an affordable luxury[…] if you paid €2 and now €3 it’s still affordable.”

Cocoa prices had come down “quite a bit from most recent historical highs”, said Mondelēz CFO Luca Zaramella, who added the market believed this year’s crop in Africa was “going to be quite good”, with yields up around “20-25% from what happened last year”.

Africa’s main coco crop was evolving well, with soil moisture at ideal levels and all the indicators showing “the supply side is quite good”, said Zaramella. “But still, there’s a few weeks [to go] so we can’t declare, but all indicators are good.”