As consumers turned to biscuits and chocolate for comfort amid the coronavirus pandemic, Mondelez International Inc. held or gained market share in roughly 80 percent of its markets in the first quarter.
Chairman and CEO Dirk Van de Put said on an earnings call that the firm saw a spike in demand for biscuits, which represent about 45 percent of revenue, due to COVID-19.
In the U.S., Van de Put said the company’s biscuit brands — Oreo, Belvita, Ritz, Triscuit and Wheat Thins — registered growth in the mid-teens or greater in Q1. Van de Put said the firm is seeing that consumers are snacking more and “are looking for that moment of comfort offered by biscuits and chocolate in today's stressful circumstances.”
Van de Put noted that the first two months of the quarter were in line with the results of last year, with strong top- and bottom-line growth. The executive said that the exception was China, which exhibited a significant slowdown in February. He noted that the country began to come back quickly in March due to the company’s local-first approach.
But the executive noted that emerging markets began to experience disruption. He said, at times, the company faced abrupt lockdowns that “made sales and distribution more difficult.” Even with those challenges and headwinds, Van de Put said the long-term prospects of emerging markets remain attractive.
Van de Put also noted that the company’s supply chain costs increased because it needed to hire temporary workers and increase compensation.
Van de Put said in the call that “the challenges we face are unlike anything we’ve seen before,” but the company firmly believes that it will “emerge stronger from this.” The executive noted that the well-being of the company’s colleagues is the firm’s utmost concern, and Mondelez has implemented strict health protocols.
Those procedures include temperature screening, the wearing of masks, social distancing and mandatory telecommuting for those who are able. Van de Put also said the company has offered enhanced benefits to frontline workers. For example, the firm extended sick leave for anyone who contracts the virus.
All told, Mondelez reported revenues of $6.7 billion and diluted earnings per share of 52 cents compared to analyst estimates of $6.6 billion and 66 cents. The confectionary company’s stock was down roughly 1.3 percent in after-hours trading on Tuesday (April 28).
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