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Snack On This:
Examination of Mondelēz International and its Role in the Snack Food Industry
Maria Triantafillou
Sowjanya Dharmasankar
ECN 201.005
21 December 2015

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Abstract
The snack food industry has revolutionized today’s society, providing consumers with
convenience and indulgence within a product. As more countries are developing, more people
are deciding to incorporate snack foods into their diet. This paper will examine the
microeconomic effects of one of the largest snack food corporations, Mondelēz International,
within the snack food industry. The information exhibited will begin with Mondelēz’s history
and background, stemming out to the company’s heritage and integrity promises. In addition,
competition with the snack food industry will be discussed, as well as recent fluctuations in
Mondelēz’s stock values. Finally, Mondelēz’s business strategies, which allow the company to
stand out from the competition, will be analyzed. This consideration of Mondelēz International’s
impact in the snack food industry points out the demand for the items produced in such a market.
As more people consume snacks, the popularity and success of Mondelēz will continue to thrive
and rise.

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Snack On This: An Examination of Mondelēz International and
its Role in the Snack Food Industry
Snack foods have become a significant part of the diets of societies across the world.
Studies contend that between 2013 and 2014 global consumers spent $374 billion on snack foods
(The Nielsen Company, 2014). Most of the money spent on snacks comes from developed
countries in North America and Europe. However, with more countries developing, that amount
will continue to rise as the means to purchase these products become more available to people
across the globe. For corporations, such as Mondelēz International, this is fantastic news.
Mondelēz International provides a variety of snacks in 165 countries, making it a prime producer
in the snack food industry. But what factors have contributed to the profitability of Mondelēz
International? And how does this company maintain its success?
The following review of Mondelēz International will discuss the relationship between the
company and its microeconomic effect in the snack food market. First, Mondelēz’s history in the
industry will be evaluated, followed by an analysis of the competition in the market and how
Mondelēz withstands that competition. Finally, Mondelēz’s business strategies, such as
promoting mindful snacking, will be assessed. These factors of business allow Mondelēz
International to thrive in the snack food industry.
“Mondelēz”: A World of Deliciousness
In 2012, Mondelēz International became the name of a split portion of the former “Kraft”
brand, which focuses more on snack foods. Coined by two of Kraft’s employees, the term
“Mondelēz” is a mixture of “world” and “delicious” in a variety of romance languages (Strom
2012). This global snacking powerhouse was launched to follow the plan of Irene Rosenfeld, the

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current Chairman and CEO of Mondelēz International, in order to spin-off of Kraft’s North
American grocery operations in October 2012 (Mondelēz International, Inc. -- Corporate
Website, (n.d.)). The corporation has partnered with 50 companies worldwide, such as Oreo,
Trident, and Ritz, giving it a rich, cultural edge.
How De-Mergers are Effecting Industries
De-mergers, or companies splitting off into two separate companies, have become more
common in the recent business years. Examples can be found all over the microeconomic world;
Sara Lee sold off their coffee business, Douwe Egberts; De-merger of Cadbury's U.S. drinks
business creating a business called Dr. Pepper Snapple Group; Sony has even announced that
they will sell off their video and audio businesses. Companies have various motives to de-merge
in order to benefit their business. These motives include, but are not limited to, focusing on core
business to improve profits, reducing the risk of dis-economies of scale, raising money to return
to shareholders, and avoiding becoming a monopoly (Riley, (n.d.)). Thus, companies can gain an
advantage from de-merging.
That being said, it is no surprise that Kraft went through with the division between the
grocery side and the snack side of the food corporation. According to a GuruFocus feature, Kraft
could take advantage of Cadbury's affluent marketing and distribution networks in emerging
markets like India, China and Brazil to help propel the growth of new products it planned to
launch in those economies (as cited in Jones, 2013). The Kraft Company believed that the split
would allow investors to realize the profits that could be made by intensifying the snack industry,
hence increasing the company’s shareholders.

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Mondelēz Stocks
Currently, Mondelēz International’s stocks are $42.93 and up +18.18% for the year (as
of December 14, 2015; 9:00 A.M.) (CNN Money, 2015). With global net revenues of $34.2
billion and earnings from continuing operations of $2.2 billion in 2014, Mondelēz has a lot to
offer to potential investors (NASDAQ, 2015). Stock analysts are also recommending investing in
this snack company, as the company maintains profits while keeping debt levels steady.
Company CEO Irene Rosenfeld contends that Mondelēz is continuing to aggressively reduce
costs to expand margins and provide the fuel for incremental investments behind their Power
Brands and route-to-market capabilities to drive sustainable revenue growth and improve market
shares (as cited in Schiavo, 2015). With an overview of the company’s strength and weaknesses
in mind, there are no significant downfalls than would suggests a near disadvantageous future for
Mondelēz.
Competition Within the Snack Food Industry
With a numerable amount of snack food companies in the market, competition for
Mondelēz is prevalent. The company’s largest competitors are corporations such as Nestle, Frito-
Lay, and Kellogg's; They offer the same type of goods Mondelēz does, but significantly different
products and brands make each one unique in the market.
Euromonitor states that Mondelēz is the world’s pre-eminent maker of snacks, with
leading market shares in every category in which they compete. Almost 30 percent of the money
spent on snacks in Europe alone goes to confections (Ferdman, 2014). This gives Mondelēz
International a competitive advantage, as it holds the No. 1 position globally in Biscuits,
Chocolate and Candy as well as the No. 2 position in Gum (as cited in Mondelēz International,

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Inc. -- Corporate Website, (n.d.)). What makes Mondelēz so special in this market is the variety
of products they produce in one hundred sixty five countries around the world. Many of their
brands have been around for over a hundred years, allowing consumers to stick to their favorite
products and build family relationships around these products. For example, one of Mondelēz’s
brands is Oreo, based off of a popular cookie that was discovered in 1912, which is a vital
ingredient in many homemade desserts, like Oreo truffles.
Nonetheless, Mondelēz does face competition in the snack market, as other companies
offer more popular selections in different categories of the industry. For example, as Mondelēz
leads the confectionery category of snacks, Frito-Lay leads the chips category of snacks.
According to Forbes, with dollar sales of nearly $3.25 billion in potato chips, Frito-Lay
commands the lead in this segment with a sixty percent market share (2014). However, with
more people opting towards the more healthy option of crackers, consumers are starting to
indulge in chips, and Frito-Lay, less often; People will consume more for companies like
Mondelēz, with brands such as Ritz.
Nestle poses the largest threat for Mondelēz, as they have the most similar products in the
market. However, in 2014, Nestle, the world’s biggest coffee maker, which derives about a fifth
of its $100 billion in sales from java, faced new member in the coffee market after Mondelez
International Inc. agreed to combine its coffee unit with its D.E Master Blenders 1753 BV
(Boyle). Although this does not pertain to the snack side of either corporation, it just goes to
show what Mondelēz is capable of in the food industry. This corporation is doing all it can to be
the best in the market.
Integrity Promises

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In order to comply with business ethics, Mondelēz has acquired integrity policies. These
policies tell consumers that the company cares about their input but also protects Mondelēz
legally if the policies are followed. According to the company: “Our global compliance and
integrity program helps guide our employees to obey all applicable laws and regulations while
conducting business around the world. It also emphasizes how important it is for us to act with
integrity and make ethical decisions for our business, our shareholders, our employees and our
consumers, because their trust and confidence is critical to our success” (Mondelēz International,
Inc. -- Corporate Website, (n.d.)). Ethics is an important portion in a company’s success because
no one feels good when indulging in a product whose producers do not send out a valuable
message.
Mondelēz is ready for anything that is thrown their way, as told by their code of conduct
on their corporate website. Nothing speaks to their corporate values more than their relentless
focus on food safety. Their consumers must have the confidence to use the products, and to serve
them to their families, without fear of getting sick. For over a hundred years, Mondelēz
International has earned that trust by making safe products. In addition, the company provides a
number of services to consumers, with employees who cover thirty two languages in order to be
at assistance all over the globe.
Mondelēz’s Business Strategies
A tremendous factor in Mondelēz’s success is its business strategies. The company not
only promotes sustainable resources, but also agriculture. By end of this year, Mondelēz plans to
cut their energy and water use in manufacturing by 15%. In addition, the company aims to
reduce greenhouse gas emissions and waste from manufacturing by 15% and make 60% of

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production in Zero Waste to landfill sites. Finally, Mondelēz wishes to eliminate 50 million
pounds (22,500 tons) of packaging material. Why is this good for business? Consumers will
notice that the company is attempting to “Go Green” and be more likely to endorse their products
rather than a company that does not.
Furthermore, Mondelēz advocates mindful snacking and a healthy lifestyle. The company
realizes that obesity and other health issue are becoming more prevalent across the globe and
they want to reduce the factors in their products that could cause any of those issues. By 2020,
Mondelēz intends to grow its “better choice” products to 25% of its revenue. The company aims
to reduce sodium and saturated fat by 10% and increase whole grains by 25%. Additionally,
Mondelēz wishes to expand its portion control options (200 calories or less) by 25%. By the end
of 2016, Mondelēz plans on placing calorie labeling front of pack on all relevant products
globally. With more people trying to have a more balanced diet today, this strategy will work to
the company’s benefit.
Conclusion
Mondelēz International is one of the world’s largest and most successful snack
corporations. Mondelēz, formerly known as Kraft Foods Inc., has acquired over 40 brands across
the world, including Trident, Nabisco and Cadbury. What makes this corporation profitable?
How well is Mondelēz doing in their business today? In this essay, those questions were
answered. De-merging from Kraft allowed this business to thrive in the snack food industry.
Mondelēz and its companies have over 100 years of history, which is a contributing factor to the
corporation’s success. However, companies, such as Nestlé and Frito-Lay, present a competition
for Mondelēz in the snack food industry. Competition, production and trends in society

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contribute a profit this corporation, along with its competitors. In addition, I discussed Mondelēz
stocks and how they have retained success. Mondelēz has acquired business strategies in order to
assure they continue to be the No. 1 snacking company in the world. While you're snacking on
an Oreo, just think about the diligence Mondelēz International has reserved to provide all these
delicious snacks to the world.

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References
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