Mondelez International Inc. said it is making investments to maintain the ground it gained on competitors last year as shoppers bought more of its snacks while they spent time at home during the pandemic.
The Chicago-based maker of Oreos and Triscuits said Thursday that comparable sales rose 3.2% annually in the fourth quarter, in line with expectations. Sales growth by that measure moderated somewhat from earlier in the pandemic, especially in North America.
Shares fell 1% to $56.50 Thursday afternoon. But Mondelez said it had increased market share in businesses such as cookies and crackers in the U.S. and chocolate in the U.K.
“We’ve gained a lot of new consumers in our brands,” said Chief Executive Dirk Van de Put on an investor call. “We are counting on being able to do that again this year.”
He said Mondelez is increasing its advertising budget and to focus more on digital outlets. The company said it has also benefited from delivering its snacks directly to stores, rather than to warehouses or third-party distributors.
Mr. Van de Put said new products Mondelez has planned for this year, and a return to investing in its business at convenience stores and airports when the pandemic subsides will also help it keep its edge this year. “We will make sure that we move faster than anybody else there,” he said.
Consumers of all income levels are spending more for name brands during the pandemic, according to market-research firm IRI. Fewer options for leisure and dining out are giving people more to spend on indulgent grocery items, the firm said.
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Some analysts have said that as the pandemic wanes, Mondelez’s competitors could gain ground again as people return to dining out and switch back to cheaper cookies and snacks. Mondelez is also facing higher costs for ingredients including cocoa and grains, which could lead to higher prices for its snacks at a time when many consumers are financially stretched.
Mr. Van de Put said the company is raising prices in certain parts of the world to offset inflation in ingredients such as cocoa. Its chocolate prices in the U.K. are going up, but it hasn’t announced any price increases in the U.S.
While the pandemic has fueled its sales in North America, Mondelez has struggled in emerging markets. Its business in countries such as Brazil and India have been hit by strict coronavirus-related lockdowns there. The company’s comparable sales in emerging markets increased 4.1% in the fourth quarter, compared with a 1.7% rise in the first three quarters of last year. Mondelez said demand in larger emerging markets including China has rebounded, while smaller one such as Mexico are still in a slump.
Mondelez said revenue in the fourth quarter rose 5.6% to $7.3 billion. It reported net income of $1.16 billion and an adjusted profit of 67 cents per share.