Mondelēz International’s CEO said already-weak consumer confidence is at risk of worsening as the war in Iran pushes up prices of everyday essentials.
During the Oreo maker's first-quarter earnings call, Dirk Van de Put said shoppers remain “quite anxious.” As the Iran conflict continues and consumers feel the impact of high oil prices, it’s “not going to help” build their confidence, he said.
“[In] the U.S., the consumer confidence there remains quite low. We expect it to further deteriorate as the Middle East conflict continues,” Van de Put told analysts. “Purchasing power is up, but the consumer remains very concerned about affordability, economic outlook and job security.”
Food executives have warned for months that affordability concerns are beginning to eat away at earnings, with high costs pushing consumers to become more selective, particularly in snacking. An acceleration in inflation could further erode consumer confidence and consumption.
Van de Put said lower-income consumers in particular are focused on lower unit prices and are being “very selective” about when and what they buy. But there has also been a larger shift in where consumers shop, with purchases at food and mass stores shifting to value, clubs and online.
Van de Put pointed out that Walmart, Costco and the value channel, saw biscuits grow more than 4% versus the total U.S. biscuit market, which was up only 0.3%.
Even before the Iran war began, food executives warned of a challenging road ahead. Despite investing in innovation, marketing and packaging changes, shoppers still haven’t returned to the category at the level many executives had expected. Some companies, including PepsiCo and General Mills, have lowered prices on some of their products to lure back shoppers.
Still, Van de Put remained upbeat about further improvements in the Chicago-based company’s business. The company is leaning into affordability and looking to change its distribution system to better enable a variety of packaging sizes and prices.
Mondelēz also expects to see a “gradual improvement” in its North American operations as it invests more in its brands. The company, which also makes Chips Ahoy!, Ritz and Clif Bar, forecast volume and revenue “turning around positively” for the remainder of the year in the region.
During the first quarter, revenue jumped to $10.1 billion, an increase from $9.31 billion a year ago. In North America, which is responsible for 25% of Mondelēz’s sales, revenue rose 0.5% to $2.6 billion.
Mondelēz also reiterated its overall growth outlook of organic net revenue growth in the range of flat to up 2% for 2026.
