Mondelez touts ‘best year ever in 2023’ despite dip in volume due to ‘one-off’ events

The maker of Oreo and Ritz crackers reported yesterday a slowdown in organic net revenue growth and volume/mix in its fourth quarter, including a 5.5 percentage point drop in volume/mix in North America, which offset gains in Europe and Latin America for an overall drop of 0.4 percentage points. The drop in North America is particularly notable given it was up 4.6 percentage points in the previous quarter.

The drop comes as prices in the region rose 7.4 percentage points with additional pricing slated to come in North America. The increase is “already agreed” upon and will help offset rising prices for cocoa and expected increases hazelnut and sugar costs, CEO Dirk Van De Put told investment analysts Tuesday after the market closed during the company’s fourth quarter earnings call.

“We are trying to offset the dollar impact of the inflation that we are seeing in our input costs and we’re not pricing for percentage of margins … which, yes, we believe is a reasonable position,” he said.

He also was quick to add that he does not believe price increases to be a significant contributor to the drop in volume in North America. Rather, he attributed the decline to a softening in the US biscuit category, tight inventory management and build up in Q3 ahead of some price increases for Clif products as well as to minimize potential disruption ahead of a system transition planned for early October.

“We expect to return to good volume mix growth in North America in the beginning of next year,” Van De Put added. “It is really a one-off situation in Q4. So we don’t really necessarily feel like there is a slowdown in North America. It’s not going to be massive volume growth, but it is going to be positive volume growth in the beginning of the year.”