Mondelez posted $6.96 billion in net revenue for the fourth quarter of 2017 — a 2.9% increase from the same period in 2016 and slightly above expectations. Sales rose in Latin America; Asia, Middle East and Africa; and Europe during the period, but that was not enough to offset a 0.8% drop in North America.
Chief Executive Dirk Van de Put told The Wall Street Journal that while snacking consumption increased during the second half of the year, the company faced problems getting its products into stores because the food maker's supply chain is recovering from last June's cyberattack.
Van de Put called 2017 a "solid year" for the company, although he acknowledged on an earnings call with analysts that things could be better, especially regarding net organic growth and North American sales. "All-in-all, it was a solid year for us given the environment," he said, according to the Seeking Alpha transcript. "But we are not satisfied and we know we still have a lot of work to do to get to a stronger path of sustainable growth of both the top and bottom line."
Van de Put took over as CEO in November from Irene Rosenfeld who stepped down as chief executive. The new CEO has said the company needs to work on its sales performance in the U.S. and elsewhere in North America, but he said on the earnings call that his philosophy is to take a balanced approach.
The company struggled during the Q4 period in North America, where sales dipped 0.8%. For its 2017 fiscal year, they fell 2.4%. “North America is the one that is continuing to be somewhat of a challenge,” Chief Financial Officer Brian Gladden told The Wall Street Journal.
Despite slower category growth in the fourth quarter, "... if you look at the whole of 2017 we are the first half, which was pretty low growth and then the second half was a lot better," Van de Put said in the transcript. In 2018, Mondelez expects global comparable sales to rise by 1% to 2%, up from 0.9% a year earlier.
The company highlighted success with its U.S. chocolate products last year, with increased momentum and more return customers. However, the CEO said there also was more to do in that area as innovation brings new products to the marketplace. Vea, the company's line of crackers and snack bars made without artificial ingredients or GMOs, debuted last summer and has been performing in line with expectations, Van de Put noted.
Large food manufacturers such as Mondelez have been quickly responding to changing food consumption habits from shoppers, punctuated by increased snacking and a demand for cleaner, better-for-you foods. Along with Vea, the company has introduced Good Thins made with rice, chickpeas, potatoes, corn and oats.
Mondelez also has several so-called "power brands" — Oreo, Milka and belVita, among others — which have been strong performers and are quite popular in the U.S. and overseas. While the latest earnings were down for North America, the company appears focused on pulling up those numbers with the help of its iconic brands.
North America is responsible for about a quarter of the company's revenue, meaning that for the snack maker to resume growth, it will need to do more on its home turf — a situation that other food companies mired in slow or falling revenue face as well. With new product launches and a roster of popular snacking brands such as Ritz, Chips Ahoy and Triscuit, Mondelez is on the right track. It's just a question of how long it will take to reposition the $68 billion food giant for future success.