Brian T. Gladden – Mondelez International, Inc.
On cocoa and dairy prices
“On commodities, I would just say a couple of things. One, as you think about cocoa,…clearly there has been a fairly significant move in cocoa prices….the hedge window for cocoa is longer than, I think, you would expect, and that’s really driven by, really our pricing, our ability and the frequency at which we can go after pricing in some of the key markets there. And in some cases, you have annual renegotiations and you want to create certainty in terms of margins in those relationships, so you’re going to go out and hedge a little bit further. So, we are hedged longer than, I think, you would expect and therefore don’t necessarily have access to the current pricing in this market at this time. The other thing I would note is that dairy for us is almost as big a buy…dairy prices are up. We have much less ability, there’s much less liquidity in that market to do hedging, so we are absorbing some of the pain associated with dairy. And again, it’s not nearly as hedged. So those are the dynamics that are playing out. In the short-term, we are seeing some input cost pressure. It’s not huge. It’s relatively small when you put all of those things together. And then cocoa, again, it’ll be a little bit outside the window of the next few quarters that we start getting some of the benefit of lower cocoa prices.”
Irene B. Rosenfeld – Mondelez International, Inc.
Heavy advertising does not necessary grow market share
“We continue to see aggressive discounting in a number of places and those are the two biggest. The good news is we are seeing – in the UK, in particular, we are starting to see our shares recover. And as I’ve said a number of times, the biggest opportunity is to redeploy some of that investment to more category building spending. And what we’re finding is in cases where there’s heavy promotional spending, it just simply does not grow the category.”
Watchful on Brexit
“Brexit is not over yet, so I would say everyone is still waiting to figure out what the actual rules will be and there’s no question it will put some pressure on both the manufacturers and the retailers and, I think, that’s a piece of the uncertainty there.”