Mondelez International
Mondelez International, Inc. is an American multinational confectionery, food and beverage company headquartered in Chicago. It was created on 1 October 2012 when Kraft Foods divided itself into a North American grocery business, which retained the Kraft name, and a global snacks business, which became Mondelez. It is among the largest snack companies in the world, with brands including Oreo, Cadbury, Milka, Toblerone, Ritz, belVita, Philadelphia, Trident, Halls and Sour Patch Kids.
| Mondelez International, Inc. | |
|---|---|
| Type | Public |
| Traded as | Nasdaq: MDLZ; S&P 500 component |
| Industry | Food, confectionery, snacks |
| Founded | 1 October 2012 by separation from Kraft Foods; predecessors from 1824 |
| Headquarters | Chicago, Illinois, United States |
| Area served | Approximately 150 countries |
| Key people | Dirk Van de Put (chairman and chief executive), Luca Zaramella (chief financial officer) |
| Products | Biscuits, chocolate, gum, confectionery, cheese and grocery, powdered beverages |
| Revenue | Approximately US$36.4 billion (2024) |
| Employees | Approximately 90,000 |
| Website | mondelezinternational.com |
The name was chosen from employee suggestions and combines a rendering of the Latin for world with a coinage suggesting delicious. It was widely mocked on announcement, and the company's position was that a name with no existing meaning was preferable for a business whose brands, rather than its corporate identity, are what consumers encounter.
History
Kraft and its predecessors
Mondelez's corporate lineage runs through Kraft Foods, founded by James L. Kraft as a Chicago cheese wholesaling business in 1903 and incorporated as J. L. Kraft and Bros. in 1909, which developed processed cheese and which was acquired by the National Dairy Products Corporation in 1930.
Its brands are considerably older than the company. Cadbury was founded in Birmingham in 1824 by John Cadbury, a Quaker who sold cocoa and drinking chocolate as an alternative to alcohol and whose successors built the model village of Bournville for their workers. Philip Suchard began producing chocolate in Switzerland in 1826 and Toblerone was created in Bern in 1908, its triangular form said to derive from the Matterhorn. Milka dates from 1901. LU was founded in Nantes in 1846. Oreo was introduced by the National Biscuit Company in 1912 and has become the best-selling biscuit in the world.
Kraft was acquired by Philip Morris in 1988 for US$12.9 billion, combined with General Foods, which Philip Morris had bought in 1985, and with Nabisco, acquired in 2000 for US$18.9 billion, and was progressively separated from the tobacco company between 2001 and 2007 as Altria distributed its holding.
The Cadbury acquisition, 2009 to 2010
Kraft launched a hostile bid for Cadbury in September 2009, and after a contested four-month process acquired it in January 2010 for approximately £11.5 billion.
The transaction was among the most politically contentious takeovers in British history. Cadbury's management opposed it, the company's Quaker heritage and its standing in Birmingham made it an object of public attachment, and Kraft's borrowing to fund the purchase raised the question whether the acquired business would be cut to service it.
Kraft stated during the bid that it hoped to keep open the Somerdale factory near Bristol, which Cadbury had announced it would close, and reversed that position within a week of completing the acquisition, having discovered, it said, that the closure was too far advanced to stop. The Takeover Panel criticised the company for making a statement it could not support, the House of Commons Business Committee examined the affair, and the resulting recommendations contributed to changes in the British takeover rules in 2011 requiring bidders to stand by statements made during an offer.
Irene Rosenfeld, Kraft's chief executive, declined to appear before the parliamentary committee, which compounded the damage. The episode is cited in British political discussion whenever a foreign acquisition of a well-known company is proposed.
The separation and since, 2012 to 2026
Kraft announced in August 2011 that it would divide, under pressure from investors including Nelson Peltz's Trian Partners and following the logic that a slow-growing North American grocery business and a faster-growing international snacks business were valued badly together. The separation completed on 1 October 2012, with Mondelez taking approximately two thirds of the revenue and the Kraft Foods Group taking the North American grocery brands; the latter merged with Heinz in 2015 to form Kraft Heinz.
Mondelez has since concentrated its portfolio. It disposed of its coffee business in 2015, contributing it to a joint venture with D.E Master Blenders that became Jacobs Douwe Egberts and subsequently JDE Peet's, in which it retained a substantial minority that it has progressively sold; it sold its gum business outside a few markets; and it declined an unsolicited approach for Hershey in 2016.
Dirk Van de Put, a Belgian executive who had led McCain Foods, became chief executive in November 2017 and has directed a series of acquisitions extending the company into adjacent categories: Tate's Bake Shop in 2018, Perfect Snacks in 2019, Give and Go in 2020, Grenade and Chipita, a Greek producer of croissants and baked snacks, in 2021 and 2022, Ricolino in Mexico for US$1.3 billion in 2022, and Clif Bar for US$2.9 billion in 2022, its largest purchase since Cadbury.
Its recent difficulty has been cocoa. Prices rose to unprecedented levels from 2023, reaching more than three times their historic range, driven by poor harvests in Côte d'Ivoire and Ghana, which together produce approximately 60 per cent of the world's cocoa, arising from disease, ageing trees, unfavourable weather attributed in part to climate change, and decades of underinvestment caused by farmgate prices too low to sustain replanting. The company raised chocolate prices substantially in response, which reduced volumes, and the tension between price and volume has been the central question in its results since.
Products and brands
Mondelez reports by category. Biscuits and baked snacks is the largest and includes Oreo, Ritz, Chips Ahoy!, belVita, LU, TUC, Club Social, Tate's, Chipita and Clif. Chocolate includes Cadbury Dairy Milk, Milka, Toblerone, Lacta, Côte d'Or, Marabou, Freia, Alpen Gold and Ricolino. Gum and candy includes Trident, Dentyne, Stride, Halls, Sour Patch Kids and Swedish Fish. Cheese and grocery includes Philadelphia, Tang and, in Australia and New Zealand, Vegemite.
Oreo is the best-selling biscuit in the world, sold in more than a hundred countries and adapted extensively to local taste, with flavours including green tea in China, where the product was reformulated and reshaped as a wafer before succeeding after an initial failure. Its marketing is among the more inventive in packaged food, including the Dunk in the Dark post published during a power failure at the 2013 Super Bowl, which is among the most cited pieces of social media advertising.
Cadbury holds a dominant position in the United Kingdom, Ireland, India, Australia and South Africa. Its Dairy Milk formulation and the Creme Egg are objects of national attachment in Britain, and changes to either, including the 2015 alteration to the Creme Egg's chocolate and the removal of the Fairtrade certification in 2017 in favour of the company's own Cocoa Life programme, have produced disproportionate public reaction.
Cocoa and supply chain
Chocolate manufacture rests on a supply chain with documented and persistent problems.
Approximately 60 per cent of the world's cocoa is grown in Côte d'Ivoire and Ghana by smallholders farming a few hectares, whose incomes are generally below national poverty lines. The prevalence of child labour in West African cocoa production has been documented repeatedly, most authoritatively by the NORC study at the University of Chicago published in 2020, which estimated that approximately 1.56 million children were engaged in child labour on cocoa farms in the two countries, a figure that had risen rather than fallen since the industry's 2001 Harkin-Engel Protocol committed it to eliminating the worst forms within four years.
Cocoa cultivation is also a substantial driver of deforestation in both countries, where forest cover has fallen very sharply since 1960.
Mondelez's response is Cocoa Life, a programme begun in 2012 covering the majority of its cocoa volume, which provides farmers with training, improved planting material, community development funding and, since 2019, a premium. Independent assessments, including by the Cocoa Barometer consortium, have found such programmes to produce measurable improvements in yields and monitoring while not raising incomes to a living level, which the reports attribute to the structural fact that the price paid for cocoa is too low to permit it regardless of the programmes attached.
The company was among the defendants in a 2021 American action brought on behalf of former child labourers, dismissed on standing grounds, and is subject to the European Union's deforestation regulation and corporate sustainability due diligence requirements, which oblige traceability to the plot on which the cocoa was grown.
Manufacturing and operations
Mondelez operates approximately 150 manufacturing facilities worldwide, of which the largest and most historically significant include Bournville in Birmingham, where Cadbury has produced chocolate since 1879 and which remains in operation; Lörrach in Germany, which produces Milka; Bern, where Toblerone is made and where the company's decision in 2023 to move part of production to Slovakia obliged it to remove the Matterhorn from the packaging, since Swiss law restricts the use of national symbols to products made in the country; Chicago, where the Nabisco bakery on the South Side produced Oreo for a century before a substantial part of the work was moved to Salinas in Mexico in 2016, a decision that became a subject of American political comment during that year's election; and plants across India, Brazil, Mexico, Poland, Russia and China.
The company's supply chain handles cocoa, wheat, dairy, sugar, palm oil, packaging and energy, and its exposure to commodity prices is greater than that of most consumer companies, since the ingredients constitute a large proportion of the cost of a biscuit or a chocolate bar. It hedges forward, typically a year or more, which delays rather than removes the effect of price movements and which is why the cocoa increases of 2023 and 2024 reached its accounts in 2024 and 2025.
Marketing
Mondelez spends in the region of US$2 billion a year on advertising and is among the larger advertisers in the world. Its approach has moved substantially toward digital and toward what it calls humaning, a coinage introduced in 2020 that attracted ridicule and which describes marketing addressed to people's identities and moments rather than to demographic segments.
Its brands' marketing is conducted locally and differs considerably between markets. Cadbury's British advertising, including the Gorilla commercial of 2007 in which an ape plays the drums to Phil Collins, and its Indian campaigns, which positioned chocolate within traditional occasions of celebration in a market where it had no such place, are among the more studied examples of brand advertising. Oreo's approach has emphasised digital responsiveness and product variation, with several hundred limited flavours released.
The company has also been a substantial participant in the debate over advertising to children, having committed under industry pledges not to advertise to audiences predominantly under twelve, commitments critics regard as narrowly drawn since they do not address family viewing or the digital environments in which children actually spend time.
Health and regulation
The company's products are, by any measure, high in sugar, fat and refined carbohydrate, and it operates in a regulatory environment that has become progressively less permissive.
Restrictions on the advertising of products high in fat, salt or sugar have been introduced in the United Kingdom, Chile, Mexico, and a growing number of other jurisdictions; front-of-pack warning labels, pioneered in Chile in 2016 and adopted across Latin America, have measurably reduced purchases of labelled products; sugar taxes apply to beverages in more than fifty countries and have been extended to confectionery in a small number; and placement restrictions limit where such products may be displayed in shops.
Mondelez's response has been portion control, in smaller packs and in per-portion labelling; reformulation, which is technically limited in chocolate since sugar is structural rather than an additive; the acquisition of products positioned as better for you, including Clif, Perfect Snacks and Grenade; and public argument that its products are treats consumed occasionally rather than staples, which is accurate for some consumers and not for others.
The prospective effect of GLP-1 appetite-suppressing medicines is the industry's principal long-term uncertainty. Early studies of the grocery purchases of households containing a user have found reductions concentrated precisely in the categories Mondelez sells, and the company's position is that the affected population remains small, that its products serve occasions rather than hunger, and that it will adapt pack sizes and formulations if required.
Assessment
Mondelez is the product of a corporate reorganisation rather than of a founding, and its coherence derives from its brands rather than from its history. Those brands are unusually durable: Oreo has been sold for more than a century, Cadbury for two, and the categories they occupy have grown with population and income in every decade since they were created.
Its recent performance has been better than that of most large packaged food companies, principally because of its emerging market exposure and because chocolate and biscuits are less exposed to private label than categories where the product is undifferentiated. Its difficulties are cocoa, whose price has moved beyond what the company can absorb or pass on without losing volume, and the general condition of the industry, in which consumers have resisted several consecutive years of price increases.
Its reputational position rests substantially on the cocoa supply chain, where the industry's collective failure to eliminate child labour a quarter of a century after undertaking to do so is documented, and on the Cadbury acquisition, which remains a live grievance in Britain fifteen years afterwards and which is cited whenever the question of foreign ownership of British companies is raised.
Controversies
NotPetya
In June 2017 the NotPetya malware, attributed by several governments to Russian military intelligence and directed initially at Ukraine through a compromised accounting package, spread worldwide and disabled a very large part of Mondelez's information technology, including approximately 1,700 servers and 24,000 laptops. The company estimated its losses at more than US$100 million in lost sales, remediation and disruption.
Its insurer, Zurich American, declined the claim under a hostile or warlike action exclusion, on the ground that the attack was an act of a foreign state. Mondelez sued, and the case became the leading test of whether cyber attacks by state actors fall within war exclusions in ordinary property policies. It settled in 2022 on undisclosed terms, and the episode has substantially changed how cyber insurance is written, with explicit war and state-actor language now standard.
Russia
Mondelez continued to operate in Russia after the 2022 invasion of Ukraine, reducing advertising and new investment while maintaining production and sales. The company's position was that food is a basic necessity and that its Russian employees should not be abandoned; the Ukrainian government placed it on a list of international sponsors of war, and a number of Nordic retailers and airlines removed its products. It has since described its Russian business as standalone and reduced.
Competition and pricing
The European Commission fined Mondelez €337.5 million in May 2024 for restricting cross-border trade within the single market, having found that the company had limited the territories and customers to which its wholesalers could sell and had refused to supply a broker in order to prevent products moving from cheaper to more expensive member states. The company cooperated and admitted the conduct.
Its pricing during the inflation of 2022 and 2023 attracted the accusation, made across the packaged food industry, of exceeding cost increases, and it was among the companies examined by European authorities over shrinkflation, the reduction of pack sizes without a corresponding price reduction.
Corporate affairs
Mondelez employs approximately 90,000 people and operates manufacturing in approximately 150 facilities. Its largest markets are the United States, the United Kingdom, India, Brazil, Mexico, Germany and China, and emerging markets produce roughly 40 per cent of revenue, a higher proportion than most American packaged food companies and the principal reason its growth has exceeded theirs.
Dirk Van de Put has been chief executive since 2017 and chairman since 2018. Irene Rosenfeld, his predecessor, led Kraft and then Mondelez from 2006 to 2017 and directed both the Cadbury acquisition and the separation.
The company reported revenue of approximately US$36.4 billion in 2024. Its margins have been compressed by cocoa costs, and its strategy statement emphasises chocolate and biscuits, the two categories in which it holds leading global positions, and the disposal or de-emphasis of everything else.
Competition
Mondelez competes with Nestlé, the largest food company in the world and its principal rival in chocolate; with Mars, privately held and the largest confectionery company, which owns Snickers, M&M's and Wrigley; with Ferrero, also private, which owns Nutella, Kinder and, since 2018, Nestlé's American confectionery; with Hershey, dominant in the United States and which Mondelez approached unsuccessfully in 2016; with PepsiCo, whose Frito-Lay is the largest savoury snack business; with Kraft Heinz, its former other half; and, in every market, with private label products.
The packaged food industry's general condition is one of slow volume growth, consumer resistance to price increases after several years of them, the rise of private label, and the prospective effect of appetite-suppressing medicines on the consumption of the categories most exposed to impulse purchase, which is precisely the snack aisle. Whether the last of these materialises at scale is the largest open question facing the sector.