Mondelez International‘s new CEO Dirk Van de Put said the snack food giant isn’t considering any broad price hikes increases to combat rising commodity costs.
“You’ve all heard about the freight inflation and some of the other commodities. But overall, we are not looking at a sort of across-the-board price increase, no, no,” he told CNBC in his first interview since taking the helm last year.
Van de Put rolled out a new strategy Friday at the company’s annual investor day meeting in Boston. The maker of Oreos, Ritz crackers and Nabisco biscuits plans to expand its e-commerce platform as well as its reach into international markets, he said. Van de Put also intends to give more attention to smaller snack foods the company’s acquired in recent years, he said.
He took over as CEO of Mondelez last fall after longtime CEO Irene Rosenfeld retired. A former veterenarian, Van de Put started his career in the public relations department of candy and pet food company Mars.
“We do have these big power brands, like you said, Oreos, Ritz, Milka, Cadbury,” he told CNBC’s Sara Eisen. But as we have grown through acquisitions, we have also acquired quite a lot of local brands, which are quite unique and quite linked to the culture. And I think they’ve been neglected a little bit.”
Van de Put said Mondelez is undervalued. Shares slid more than 3 percent Friday. They’ve now dipped about 2 percent this year.
Van de Put said margin improvement under former CEO Irene Rosenfeld has been “quite impressive.” Because of that, the company can now start focusing on topline growth.
“You don’t have to constantly be obsessed about your margins because they’re in the right place. So if you now get volume growth to kick in at these higher margins, that’s a huge benefit for us,” he said.
The maker of Nabisco biscuits, Ritz crackers and Chips Ahoy cookies expects revenue this year to grow between 1 percent to 2 percent. It also plans to buy back approximately $2 billion in shares.
Next year, Mondelez anticipates revenue to rise by 2 percent to 3 percent and adjusted earnings per share to grow by 3 percent to 5 percent. The company is projecting approximately $2.8 billion in free cash flow.
Over the long term, Mondelez said it’s targeting annual revenue growth of 3 percent or more, adjusted earnings per share in the “high-single” digits, free cash flow of $3 billion or more and dividend growth that outpaces adjusted earnings per share growth.
Its revenue forecasts are “organic,” meaning they exclude fluctuations in sales from acquisitions or divestitures.
Mondelez gave its financial targets as it unveiled a new tagline, “snacking made right.” The company said this builds on Mondelez’s promise to offer consumers “the right snack, for the right moment, made the right way.”
The new strategy comes as Van de Put settles into his new role. He took over as CEO of the snack giant last fall after longtime CEO Irene Rosenfeld retired.
Packaged food as a whole has struggled as consumers ditch boxed and canned food in favor of more fresh foods and niche brands. Snacks are a growth opportunity, though, especially among younger consumers.