Mondelez to Launch Oreo and Green & Black’s in US After Spurn From Hershey
08 Sep 2016 –-- Mondelez International is undertaking a major onslaught on the US chocolate market by launching two key brands, after its attempt to make up for its weakness in the US chocolate market by buying Hershey was spurned.
Mondelez is launching its Oreo brand, currently available in over 20 countries, in the US next year, as it looks to establish itself in a US chocolate market where it has scant presence.
Its Oreo brand is made with its Green & Black’s chocolate, its sustainable chocolate brand which is popular in parts of Europe.
In the premium segment, Mondelez is to sell its Green & Black’s organic brand in more stores in the US.
Mondelez will also launch a new range under the organic brand, which will contain no artificial colors, flavors or preservatives.
The launch of the two brands in the US would appear to suggest that Mondelez, which was hived off from Kraft Foods in 2012 and is the second biggest seller of chocolate globally, is prepared to go it alone to establish a stronger position in the US chocolate market.
Mondelez walked away from takeover talks with Hershey last month, after it $23bn offer was rejected.
Tim Cofer, Chief Growth Officer, said: "With our strong brands and global expertise in chocolate, we see enormous potential to grow our US business and expand the category.”
“The US is the world's largest chocolate market, valued at $14 billion. However, per capita consumption is only about half that of many developed European chocolate markets."
Separately, Mondelez flagged up that its effort to build a strong e-commerce business was bearing fruit.
It said that the relaunch of its Belvita biscuits brands on Amazon has generated a sales uplift of more than 60 percent.
Additionally, it said a live stream of Chinese celebrities on Alibaba's Tmall platform generated a tenfold increase in Oreo's e-commerce sales.
During the first six months of the year, Mondelez's e-commerce sales were up more than 30 percent.
In the six months to June 30, Mondelez reported sales of $12.8bn and an operating income of $1.4bn.
"Our advantaged platform positions us as one of the few industry players with the assets and ambition to deliver strong, sustainable growth on both the top and bottom lines, while we also return significant cash to our shareholders," said Brian Gladden, chief financial officer.
"Since the launch of the company in October 2012, Mondelez International has delivered total shareholder return of 72 percent, which has outpaced both the S&P 500 and its consumer staples peers," he added.
