Mondelēz sees decline in volume sales for Europe, but says end of customer disruption in sight

High commodity prices are high on the agenda. American multinational Mondelēz has felt this keenly, particularly in the impact it has had on customer disruption in Europe, where they have faced tough negotiations with retailers over prices.

In its newly released Q1 results, volume sales for Europe are still down. But the company says the end is in sight for negotiations. 

Success in Europe?

Growth for Mondelēz’s Europe sales was up 4.4%. While this growth was positive, it relied on price, and was significantly offset by a decline in volume/mix.

In terms of volume/mix, Mondelēz has seen significant decline in almost all markets, with a contraction of -3.5% in Europe (the only segment that bucks the trend is emerging markets, which saw a volume growth of 0.1% and was largely successful for Mondelēz across the board).

Since 2022, Mondelēz have experienced customer disruption​ in Europe, with disagreements over pricing slowing down negotiations between the multinational and European retailers. One of the reasons for the low volume growth, suggested Mondelēz CFO Luca Zaramella in an earnings call, is this customer disruption in the European market.

Despite this, however, core categories including chocolates, biscuits and baked snacks are ‘still demonstrating relatively more resilience and lower elasticity than the broader food universe,’ said CEO Dirk Van De Put, and this is particularly true for these categories in Europe where consumer confidence is improving.  

“While volume growth has slowed, the Chocolate and Biscuit categories are holding better than the broader FMCG landscape and we’re hearing increased optimism about the go-forward economic outlook.”