The rise in cocoa prices has been attributed to poor harvests in Africa, due to poor weather conditions that affected growing conditions. Cocoa prices last year, and until 2024.
Mondelez CEO Dirk Van de Put said consumers around the world are frustrated by price inflation. However, Europeans are more patient and are less likely to abandon a category because of price increases.
In Europe, there was "more positivity" about higher prices as the consumer had received "good wage increases" as well as lower inflation. Overall, consumer sentiment was positive. [in Europe] "That's good," he replied.
Mondelez expected a good second half of its financial year, as the new prices introduced on the market about a month earlier had already shown positive results. In order to further stimulate sales, additional mechanisms will be implemented in the near future. These include "new products at different prices" instead of general price increases.
Will Mondelez raise chocolate prices?
He said line price increases were coming, but only in stages designed to ensure consumers responded in the "right" way. He continued: "Most people don't like to stop eating chocolate regularly. [...] It's an affordable luxury [...] If you paid €2 but you're now paying €3, it's still affordable."
Luca Zaramella said cocoa prices have “come down a lot” from recent highs. The market believes this year’s harvest in Africa will be “quite good” and yields are expected to increase “by around 20-25 %.”
Zaramella said the cocoa harvest in Africa is progressing well. Soil moisture was at an ideal level and supply indicators were “quite good.” Zaramella said there were still a few weeks left before the cocoa harvest would be ready [to go] “We can’t say for sure, but the indicators all point to a good outcome.”
Zaramella said that if the company had put in place some form of cost protection for 2024, it would mean a “material decline in cocoa prices.” He also said the third-quarter financial report would shed light on cocoa prices in 2025.
He confirmed that no changes would be made to the cocoa formula in major brands such as
Mondelez's ambitious growth plans
Zaramella said if cocoa prices stabilize, it would give the company more flexibility. “2026 will be a big year,” he added. That’s where they should have been before the recent inflationary pressure.
Mondelez's ambitious growth plans included opening new markets and expanding into Brazil, China and India.
Van de Put said the company was aiming to add millions of stores in its target countries. It had added hundreds of thousands of SKUs in the first half of the year alone.
Van de Put said cakes and pastries were another potential growth area for Mondelez, as the product category was often found alongside other Mondelez products and biscuits in Europe.
It's an extension of the biscuit space, and it's a multi-billion dollar market that has fragmented globally. He said we have an inherent right to be in that market.
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