Mondelez facing challenges in candy, gum business

by Eric Schroeder
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DEERFIELD, ILL. — While global biscuit and chocolate brands are performing well year to date, gum and candy are “below expectations” at Mondelēz International, Inc., said Irene Rosenfeld, chairman and chief executive officer.

Speaking to analysts on Nov. 7 as part of a conference call to discuss third-quarter results, Ms. Rosenfeld specifically mentioned gum as a category that has not lived up to expectations in fiscal 2012.

“The key challenge remains gum, especially Trident, whose revenue declined low single digits,” Ms. Rosenfeld said. “Although the brand grew in developing markets, it was more than offset by weakness in developed markets. To be frank, gum has been disappointing for quite some time and it’s taking us longer to change the trajectory than we anticipated. We have, however, taken a number of steps to fix our performance and we expect to see gradual improvement over the next year.”

Expanding on Ms. Rosenfeld’s comments, Dave Brearton, executive vice-president and chief financial officer, said gum was down sharply in France, Spain and Greece. The company is responding by driving innovation, he said.

“In France and Spain, we’re introducing 40 Minutes, a new gum that promises extra-long freshness,” he said. “And in Greece, we’re launching Twist, which is similar to Stride ID in the U.S. We’re making it easier for consumers at the point of buying, including resetting our hot zones in nearly 30,000 outlets and expanding our offerings across a full range of price points.”

Mr. Brearton did note that the performance of gum and candy in the United States did improve versus recent trends.

“Gum revenue was nearly flat as the successful launch of Stride ID in August largely offset declines in other brands,” Mr. Brearton said of U.S. gum results. “And while it’s still early, we’ve been pleased with the performance of ID to date.” 

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