Mondelēz International is supporting whopping shelf-price increases with an even bigger uptick in its advertising spend, the snack marketer's executives said late Tuesday.
Advertising and consumer promotion spending is up by double-digits year-to-date, as the maker of Oreo cookies, Ritz crackers and Cadbury chocolates passes along rising commodity, supply chain and transportation costs to retail. In the U.S., Mondelēz intends to raise prices by another 6% to 7% in January, but will soften the blow to consumers through promotions intended to maintain sales volumes, while reinvesting about 50% of its operating profits back into brand-building initiatives.
“The worst you can do, I think, is increase prices and not increase your support for your brand,” Dirk Van de Put, chairman and CEO, told analysts during the company's third-quarter conference call on Tuesday. “So we’ve been supporting our brands now every year, more and more.
The company's executives also reported progress in ambitions to grow its leading cookie brand, Oreo, by $1 billion by 2023, in part through the September release of an Oreo x Pokémon edition that features 16 limited edition cookie designs inspired by the popular media franchise.