Mondelēz growth strategy: Overview
- Mondelēz returns to volume-led growth through market share gains
- Emerging markets including India, China and Brazil drive expansion
- Affordability remains critical despite easing inflation and cocoa costs
- Innovation boosts trial, but repeat purchases determine long-term success
- Distribution, e-commerce and value channels support future growth opportunities
Mondelēz International’s undergoing a major strategy shift.
After years of inflation-led price increases, which weakened consumer demand and weighed on profits, the confectionery and snacking giant is switching to volume-led growth.
Rather than relying on charging more, the maker of big-name brands including Cadbury, Toblerone, Oreo and Milka is focusing instead on selling more.
And, judging by its latest earnings report, which saw higher sales volumes contribute 1.8 percentage points to organic net revenue growth, net revenue increase by 2.3% and gross profit by $1.3bn (€1.1bn), the new business formula appears to be working.
However, as Statista’s senior data journalist Sandra Ahrens explains, Mondelēz’s recent success is about more than execution alone. The markets it operates in, and the growth opportunities they offer, played a significant role.
Market dynamics
Crucially, the opportunities for volume-led growth are not evenly distributed across markets.
While mature confectionery markets face ongoing pressure from affordability concerns and changing consumption habits, emerging economies offer manufacturers a different set of growth opportunities.
Emerging markets, says Ahrens, played a particularly important role in the company’s growth.
Organic sales in Asia, the Middle East and Africa increased 7.7%, driven primarily by volume and mix rather than pricing.
While India, China and Brazil are among the countries most likely to drive confectionery growth over the next five years, due to rising disposable incomes, urbanisation and changing consumption habits.
Having said that, Mondelēz is also making gains in more mature markets such as Europe, where category volumes remain under pressure.
The profitability challenge
While volume growth is an important indicator of recovery, it doesn’t necessarily translate into stronger profitability.
For Mondelēz, the challenge is to increase sales volumes without relying on further price increases, while maintaining revenue growth and protecting margins.
This requires a careful balance between volume, pricing and product mix. While higher volumes can help offset slower price growth, increased promotional activity and pressure to keep products affordable could weigh on profitability.
Organic revenue growth will therefore remain an important measure of the strategy’s success, helping to distinguish growth driven by increased sales volumes from that generated through pricing and changes in product mix. Gross profit and operating margins will also be important indicators of whether the company is converting higher sales into sustainable financial returns.
In other words, selling more is only part of the challenge. Mondelēz must ensure that its volume-led strategy generates profitable growth rather than simply increasing the number of products sold.
Achieving this balance will depend not only on how efficiently Mondelēz manages its pricing and margins, but on how well it responds to changing consumer expectations.
As shoppers become more selective about where they spend, balancing affordability with the desire for indulgence will be crucial.
Indulgence vs affordability
Consumers haven’t abandoned their appetite for indulgence, but they are becoming more selective about what they buy.
Affordability remains a key consideration at the checkout, putting pressure on Mondelēz to offer products that deliver value without compromising on taste or quality.
This is particularly important as the company looks to drive volume growth rather than rely on further price increases.
However, increasing volumes without putting pressure on profitability will be a key challenge. Greater reliance on promotions and lower-priced products could help stimulate demand, but may squeeze margins if not carefully managed.
At the same time, changing consumer preferences are reshaping the snacking category. Smaller portions, reduced-sugar alternatives and products with improved nutritional profiles are gaining importance as shoppers look to balance the enjoyment of a treat with broader health and wellness goals.
This creates an opportunity for Mondelēz to adapt its portfolio, catering to demand for more mindful forms of indulgence while maintaining the appeal of its established brands.
Beyond smaller portions and reduced-sugar alternatives, functional confectionery could provide another avenue for growth. Although the category remains relatively niche, interest is building in products that offer more than traditional enjoyment, combining familiar flavours and formats with additional benefits such as protein and fibre.
The challenge for Mondelēz will be to respond to these preferences without alienating consumers who continue to value traditional confectionery.
Tapping into these emerging consumer preferences will require continued investment in innovation and new product development.
Measuring recovery
Ahrens believes demand recovery cannot simply be measured by sales growth.
Instead, confectionery companies should focus on indicators such as purchase frequency, basket size and reliance on promotional activity.
The key question is whether consumers are genuinely buying more confectionery or simply responding to temporary discounts.
Health considerations remain another important factor. Even as financial pressures moderate, some consumers continue to limit sugar consumption and seek portion-controlled products.
These factors, says Ahrens, signal that the market may not return to pre-inflation purchasing patterns, creating challenges and opportunities for manufacturers.
This makes understanding the difference between increased consumption and changes in purchasing behaviour especially important, because higher sales could indicate stronger demand, but they could also reflect consumers switching between brands, buying during promotions or choosing different pack sizes.
Innovation drives growth
Innovation continues to play a central role in Mondelēz’s strategy.
New flavours, textures and limited-edition launches help generate excitement and encourage consumer experimentation.
According to Statista data, almost a third (30%) of UK consumers say they actively seek out new confectionery launches whenever possible.
Recent examples such as Cadbury Dairy Milk Biscoff and Dairy Milk Iced Latte demonstrate how collaborations and limited editions can reinvigorate established brands and attract new consumer groups.
However, Ahrens notes that launch success shouldn’t be measured by initial sales alone.
While strong early demand can generate excitement and demonstrate consumer interest, the real test is whether a product can sustain that momentum, build repeat purchases and establish a lasting place in the market.
Added to this, brands need to assess whether new launches are creating incremental demand or simply diverting sales from existing products.
This is particularly important in a market where volume growth is becoming a priority. If consumers are simply switching between products within the same portfolio, manufacturers may generate excitement without significantly increasing overall sales.
The ability to develop products that attract new consumers, encourage additional purchasing occasions and generate repeat demand will therefore be crucial.
Multi-channel growth
Another important aspect of Mondelēz’s strategy is adapting to changing shopping habits.
Consumers are increasingly purchasing snacks through e-commerce, quick-commerce platforms and value-focused retailers, requiring manufacturers to tailor formats, promotions and product portfolios to different channels.
Online and rapid-delivery platforms are creating new opportunities to influence purchasing decisions, particularly around convenience and impulse purchases.
As a result, businesses need to understand how purchasing behaviour differs across channels, adapting their product formats, pricing and promotional strategies accordingly.
At the same time, the growth of value-focused retail is increasing the importance of offering products and pack sizes that meet different spending requirements.
Companies that can effectively reach shoppers across traditional retail, convenience, online and rapid-delivery channels are in a strong position to deliver long-term growth.
Sustaining growth
Mondelēz’s shift towards volume-led growth reflects a broader change in the confectionery market.
Consumers still want affordable indulgence, but spending habits are becoming more selective and fragmented across different retail channels.
For manufacturers, the challenge is to generate genuine incremental demand while protecting margins, maintaining brand relevance and responding to changing consumer expectations.
Mondelēz’s recent performance suggests its strategy is beginning to deliver results. But sustaining that momentum will require more than simply selling greater volumes.
Its ability to identify new growth markets, innovate successfully and offer consumers products that balance affordability with indulgence will be critical to its long-term success.
