Cadbury (owned by Mondelez) is the chocolate leader in Australia its products make the chocolate hall of fame you might have heard of Freddo 90 million are eaten every year in Australia, Cadbury Roses, Cherry Ripe and Picnic. During Easter many of these products turn into eggs.
There are certain brands that retailers have to stock to be in business Mondelez has a portfolio of them. They are also dominant in the biscuit category with brands such as Oreo otherwise known as milk's favourite cookie with 35.9% share of the US market in 2015. Over the last two years Mondelez's profitability has increased substantially but at the cost of sales. They used to have 74,000 product varieties its down to 30,000 today. Less choices for you means greater profits for Mondelez.
Chocolate is still a good investment though growth is slowing. Snacking is a $1.2 trillion market with emerging markets just beginning to snack. Branded chocolate typically have good margins, when was the last time you craved private label chocolate? We all want our Cadbury. Let's hope you get it Happy Easter everyone.
Decisive does not have a position in Mondelez (MDLZ). The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.
