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Oreos and Chips Ahoy aren’t flying off the shelves in the inflation economy – and it’s hurting sales at Mondelez International.
The snack and beverage giant reported second-quarter earnings on Tuesday, detailing how its popular cookies are being passed over for cheaper, store-branded treats. That decline may also be in part due to price hikes the company put in place to offset the rising costs of raw materials, such as cocoa and sugar.
To meet consumers at “right price points,” Mondelez’s CEO Dirk Van de Put told investors the company is “implementing new, targeted promotions,” including a “pack size priced in the $3 to $4 range to drive continued brand loyalty and value for Oreo, Chips Ahoy, and Ritz.” During the earnings call, de Put mentioned consumers 39 times.
The Chicago-based company has already launched Oreo-centric promotions, including a Star Wars Oreo and Oreo Space Dunk, in an effort to attract Star Wars fans, de Put said.
Even with quirky promotions, sales in North America slipped 3.4%, while European sales fell 1.8%. Sales in Asia declined by 1.4%. In a bright spot, sales in Latin America nudged up just 0.3%.
The Belvita biscuit maker missed the Street’s revenue expectations. During the second quarter, it reported revenue of $8.3 billion. Analysts forecasted it would generate $8.4 billion.
In May, Mondelēz agreed to pay $366 million to the European Union (EU) for limiting cross-border sales of its chocolate, biscuit, and coffee products.