Mondelēz is changing course after US consumers sharply cut back on snack purchases in the last three months amid mounting cost-of-living pressures and economic uncertainty fueled in part by the drawn-out government shutdown sidelining millions of paychecks.
While the sweets and snack giant saw organic net revenue grow 3.4% in the third quarter, most of the gains were driven by price – which many US consumers are no longer willing or able to absorb, resulting in a 4.6% drop in volume and mix. This is a notably steeper decline than the year-to-date, in which volume and mix fell 3.2% while organic net revenue growth climbed 4%, according to Mondelēz.
In the US, volume fell a whopping 4% in the past three months versus a 2.8% average decline year-to-date, which CEO Dirk Van de Put bluntly characterized in a call with investors on Tuesday as “not good.”
The drop is driven “by a consumer who is very concerned in general about the economy” and “frustrated with the pricing they’re seeing,” he told investors.
“We see the basket size of the consumer is really not increasing over the last three years … as prices have gone up. They’re being more squeezed on what they can buy within that basket and they are tending to focus on what are the essentials,” he explained.
“As a consequence, snacking categories are not that essential to them, and we’re seeing that in our volumes,” he added. “On top of that, promos are not necessarily delivering the expected ROI.”
Further complicating the picture is consumers’ bifurcated response to higher prices and broad economic uncertainty.
“We’re seeing the same behavior that we have seen before, in the sense that they are seeking value. But that means different things,” Van de Put said.
“For the lower income consumers, that means going to smaller packs at the right price points. For the higher income consumer that usually goes for bigger packs and buying on promotion,” he explained.
To address these headwinds, and manage consumers’ bifurcated response to price hikes and the current economy, Van de Put said Mondelēz is adopting a new playbook that includes accelerating innovation, expanding value offerings, bolstering its omnichannel presence in new channels and with enhanced displays and upgrading its promotional framework to deliver stronger ROIs.
How is Mondelēz leveraging innovation?
New products that meet evolving consumer demands, including better-for-you snacks, is fundamental to Mondelēz’s growth strategy in the current climate, according to Van de Put.
He explained in prepared remarks that the company is accelerating innovation “in attractive areas like premium biscuits with chocolate and choco-bakery, as well as better-for-you crackers and snack bars with on-trend ingredient profiles.”
For example, the company opted to make Oreo Reese’s a permanent offering in 2026 after “the stellar success of our current, limited-time offering,” Van de Put said.
He also called out plans to expand Clif Builders high-protein, low-sugar offerings, and expanding the Zero Sugar and Gluten-Free Oreo ranges.
“Protein is doing well, so we are driving our protein range quite hard. We’re seeing 20% plus growth in the Perfect Bar and in Builders. So, that is something that we will continue to double down on,” Van de Put said.
The company also sees “tremendous potential” in Tate’s and Give and Go to drive sales and consumer engagement through innovation, he added.
How is Mondelēz balancing higher costs but lower price tolerance?
Recognizing that “it is not easy to price in the US,” where consumers are increasingly budget-conscious, Van de Put said Mondelēz will lean into pack-price architecture to meet different consumer views of “value.”
This includes promoting multi-packs, in which Van de Put said he sees “big opportunity” as they can cover several days and usage occasions, including on-the-go and as a snack in the children’s packed lunches.
On the other end of the spectrum, Van de Put reiterated the need to shoehorn smaller packs under the $3 price point.
These changes in price-pack architecture should open doors for Mondelēz in channels where it currently under-indexes but sees significant potential given consumers’ shifting shopping habits. These include convenience, club and value channels, Van de Put noted.
To further support expansion in these channels, as well as offset poor promotion ROI, Mondelēz plans to increase displays and route-to-market investments, he added.
“We’ve seen that we have to shift the way we do certain promotions. We need a lot more activation – not just the price decrease, but activations featuring special events, things like that,” he said.
Will Mondelēz hit its targets?
These strategies combined give Van de Put confidence that Mondelēz will see positive growth next year, he said.
“Year after year, survey data shows that consumers count on their favorite cookies, crackers, chocolate, cakes and pastries to celebrate both major life milestones and everyday pleasures,” he explained. “The continued evolution of snacking occasions offers exciting opportunities to navigate changing consumer tastes and habits while delivering attractive long-term growth.”
With this in mind, while also acknowledging the ongoing challenging operating environment, Mondelēz updated its full-year 2025 outlook to an organic net revenue increase of 4%, but an approximate 15% decline in earnings per share, Van de Put said.
