Relations with retailers will take precedence over consumer promotions for the foreseeable future at Mondelez International.
After implementing price increases in December in response to higher operating costs, Mondelez recorded North American sales growth of 12.3% for the year and 19.5% for the quarter ended Dec. 31.
Having spent more on consumer promotions last year than in 2021, the company is focused on improving service levels to retailers and fine-tuning acquisitions like Clif Bar as it prepares to offload its chewing gum business.
“From a promotional perspective, since we are rebuilding our customer service and our inventories in clients, there is no need for us to promote more,” Mondelez chairman and CEO Dirk Van de Put said on a Tuesday earnings call with analysts.
“In fact, what we've done in the last month is promote less to get our customer service back up.”
Since acquiring Clif Bar last August, Mondelez has been tweaking the latest addition to its baked-snacks portfolio with price increases and SKU rationalization.
Clif Bar was one of three acquisitions Mondelez closed in 2022—the others being European snacks marketer Chipita S.A. and leading Mexican confectioner Ricolino.
Later this year, the company will complete the planned divestiture of the Dentyne, Trident and other gum brands to Perfetti Van Melle in Canada, Europe and the United States for $1.35 billion.
According to Van de Put, in 2020 Oreo surpassed $4 billion in global net revenue, “further solidifying its position as the world's favorite cookie.”