Mondelez International | Success Story of the Confectionery Giant

Mondelez International, popularly known as Mondelēz, is a confectionery, snack food, and beverages company. The company has its origins in Chicago, Illinois. Some of its multi-million dollar portfolio brands are food industry giants like Oreo, Milka, Cadbury, Toblerone, Tang, Belvita, Trident, and Chips Ahoy! Mondelez manufactures cookies, gum, biscuits, chocolate, and powdered beverages. It has consumers in over 165 countries in the world. 

About

Mondelez International has a history of over 100 years. The company has more than 79,000 workers. It is one of the most successful companies in the food industry because of its unique marketing strategy. With a tradition that goes back a century, Mondelez is still innovative with its marketing campaigns and invention of food products. 

Origin and Founders

In 1911, Thomas H. McInerney moved to Chicago to work in a coal factory. The company was operating an ice cream division. After working in the coal company for a while, Thomas started gaining interest in the ice cream division of the company. He established a multi-million dollar ice cream business in Chicago within nine years. After achieving success in the ice cream industry, he thought about launching a consolidating dairy products company. On December 10, 1923, Thomas H. McInerney formed National Dairy Products Corporation. The organization was formed to execute a rollup strategy in the ice cream industry of the United States of America. By 1930, through the acquisition of several confectioneries, the National Dairy Products Corporation became the biggest dairy company in the United States and the world.

Acquirement of Kraft

In 1903, James L. Kraft began selling cheese in Chicago. He used to buy cheese at wholesale price and used to sell it to local grocery stores on a horse-drawn wagon. Eleven years later, he established his cheese manufacturing company in Stockton, Illinois. He brought his brothers into the business and named the company J.L. Kraft & Bros. The company achieved thriving success in a short period of time. By 1926, the company listed its name on the New York Stock Exchange. Two years later, it acquired Phenix Cheese Company, a cream cheese manufacturing company. By 1930, the company was selling over 40% of cheese products in the country. In the same year, National Dairy Products Corporation decided to acquire Kraft. After the acquisition, National Dairy’s sales went up to $400 million. 

Domination In The Confectionery World

During the wartime years (1939-45), the growth of the National Dairy Products Corporation skyrocketed. Its diversified dairy products remained in high demand during wartime. The company recorded sales worth $593.9 million in 1944. Between 1945-60, the company expanded its business by establishing modernized plants and equipment. It spent over $100 million on expansion. They built a new research laboratory, and by 1948, the sales went up to $986.4 million. During the 1950s, the company constructed new plants in England, Australia, and Germany. In 1962, National Dairy Products Corporation earned $1.82 billion. Seven years later, the company decided to change its name from National Dairy Products Corporation to Kraftco Corporation due to the massive changes in the business that started in 1923. 

1980-2010

In 1980, Kraftco Corporation merged with the container and packaging products giant Dart Industries and formed Dart & Kraft. However, the new acquisitions did not achieve the same success as the previous ones. The company’s revenue went slightly offset; hence, Dart & Kraft established a new entity for its non-food business. After the new establishment, the company changed its name back to Kraft Inc. In 1988, Altria Group (previously known as Philip Morris Companies, Inc) acquired Kraft Inc. Altria group was one of the biggest producers and marketers of cigarettes and tobacco-related products.

After the acquisition, Altria merged Kraft and Philip Morris’s General Foods unit and renamed the company Kraft General Foods. However, due to company politics and slow addressing of issues, the company’s development reversed. As a result, the company sold off its frozen food unit and changed its name to Kraft Foods. By 2006, the company sold its sugar confectionery to Wrigley and its pet snacks division to Del Monte. In 2007, Altria sold off its 88.1% stake in Kraft by distributing the shares to its shareholders. By the end of the year, the two companies were no longer affiliated. 

Acquisition of Cadbury

In 2009, Kraft made it to the headlines by taking over Britain’s multi-billion-dollar confectionery group, Cadbury. Initially, they offered Cadbury £9.8 billion. However, Cadbury rejected it and claimed it to be a derisory offer. Later on, Cadbury accepted a revised offer of  £11.5 billion ($19.5 billion). After Kraft’s acquisition, Cadbury’s sales went flat. Kraft’s net profit fell from $675 million to $540 million. 

The New Entity: Mondelez International

In 2011, Kraft announced that the company would be split into two divisions. The aim of the split was to create an international snack food manufacturing company and a North American grocery company. After a global competition, two employees from Kraft suggested a name for the new entity. It was “Mondelez.” Monde derives from the French meaning “World,” and “Delez” is a modified version of the word “Delicious.” It is pronounced as Mohn-dah-leez. After the split, Kraft Foods became Mondelez International and created Kraft Foods Group as the new grocery company.

In 2015, Kraft Foods Group became Kraft Heinz after merging with food processing company Heinz. In 2018, Mondelez International acquired the fast-growing, premium cookie brand Tate’s Bake Shop for $500 million. During the Covid-19 lockdown, Mondelez International’s sales increased by 15% and the company’s revenue by 3%. Its annual revenue is more than $25 billion, and consumers from 160 countries enjoy its delectable snack foods, confectionery, and beverages. 

Also read: Aditi Madan | Success story of the BluePine Foods