Mondelez International – coming to a snack aisle near you

Mondelez International might have an unfamiliar name but is the brand behind many American family brands.
Mondelez International might have an unfamiliar name but is the brand behind many American family brands.

Purple lights beamed from corner to corner, Indian tabla and Spanish guitar blared from speakers and a bountiful buffet of snacks was provided. Guests laughed heartily amid the tinkle of tableware and chatter of acquaintances busily catching up with each other.

Cocktail party? Holiday fest? Housewarming?

Nope – the first annual meeting from Mondelez International at the North Shore Center for the Performing Arts in Skokie, which hosted the event Tuesday.

“Monde-who?” an elderly gentleman wondered aloud after asking one of several security guards flanking the entrance what organization the crowd had congregated for.

All the gentleman had to do was peek behind the security guards to see the buffet tables piled with Mondelez treats such as BelVita biscuits, Gevalia coffee and lots of Oreo cookies.

Mondelez International is the new name of Kraft Foods’ snack division. “Mondelez” (pronounced mon-de-leez) is a combination of “monde,” the French word for world, and “delicious.” Kraft Foods split into two entities last October.

While the new Kraft Foods Group focuses on established food brands such as Oscar Meyer wieners and Kraft American cheese slices in the U.S., Mondelez is concentrating on the candy and snack business in emerging and international markets.

Still, Mondelez has been struggling to create the brand power its American-based competitors enjoy. “It’s like a $35 billion startup,” said Mondelez spokeswoman Donna Sitkiewicz.

CEO Irene Rosenfeld reassured shareholders that despite a dip in first-quarter profits, Mondelez’s bottom line should bounce back thanks to the company’s focus on emerging markets.

“In 2007, nearly two thirds of our sales came from North America,” Rosenfeld said. “But today, 80 percent of our revenue comes from outside North America, half of which is in emerging markets.”

Indeed, while the Mondelez name remains foreign to many consumers, its brands are beloved–Philadelphia Cream Cheese, Triscuit, Oreo and Chiclets – just to name a few. In fact, Mondelez is the global leader in biscuits, chocolate, candy and powdered beverages.

“As GDP per capita rises in the emerging markets, it drives higher consumption of chocolate, biscuits and other snacks,” Rosenfeld said. “With nearly 40 percent of our revenue coming from emerging markets and a terrific array of iconic brands, we’re well positioned to take advantage of this growth.”

Rosenfeld cited the example of Aero Bubbly, an aerated chocolate bar originally from Britain, to illustrate the globalization of the snack food industry. Mondelez has moved Aero Bubbly to the German, French and Russian markets with success and is in the midst of a Brazilian and South African introduction. The push has resulted in an $80 million revenue increase in one year – one of the most successful chocolate products to debut on the international stage in the past five years, she said.

But not everything has been smooth and creamy for Mondelez. The company attracted worldwide attention earlier this month when it resisted attempts by workers in Egypt and Tunisia to unionize. The company said organizers had not followed proper procedures. Rosenfeld told shareholders that workers received pay increases and that the matter had been turned over to a labor tribunal.

Union leaders, however, disagreed with her description of events.

Representatives from the AFL-CIO, the International Union of Food Workers, and Chicago-based union said Mondelez’s refusal to recognize the unions were a “violation of human rights in North Africa.”

Environmental groups were in attendance, too, and they asked Mondelez’s board to consider the packaging waste that snack foods produce.

“While the company has developed sustainability policies on many issues, it has not stated a position on the key emerging policy issue of taking responsibility for post consumer packaging,” argued Anita Green, manager of socially responsible investing at Wespath Investment Management, which is related to the United Methodist Church.

Most shareholders, however, were supportive of management. They voted down shareholder proposals calling for more transparency in sustainability efforts and gender equality measures in factories. And they appeared
to welcome Rosenfeld’s upbeat conclusion.

“Mondelez International is well positioned to deliver sustainable, profitable growth,” Rosenfeld said. A backdrop behind her flashed “Let the joy begin!”

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