Snack manufacturer Mondelez has had a strong quarter, thanks to higher prices and volume growth for its chocolate and biscuits. At the same time, the war in Ukraine is costing the company hundreds of millions.
More price increases on the way
Consumers continue to snack in times of crisis: the producer of brands such as Oreos, LU, Milka and Côte d’Or saw sales in the first quarter rise by 7.3 % to 7.76 billion dollars (7.3 billion euros), which is better than expected. The strong figure is due to price increases and a sustained demand for snacks.
But there is a downside: the operating profit was 189 million dollars (180 million euros) lower because of the war in Ukraine, where the manufacturer had to close two factories. For the rest of the year, Mondelez expects a further setback of 200 million dollars (190 million euros) due to lost income in Ukraine. The manufacturer has to look for alternatives for certain products. Cent Wafers, among others, had been produced in Ukraine since last year.
As a result of increased costs, the manufacturer is forced to further raise prices in a number of markets. This could eventually weigh on consumption, although this has not been the case so far.
Earlier, PepsiCo also reported a loss of almost half a billion dollars due to the war in Ukraine.