Milling & Baking News - December 3, 2019 - 10

Business

Multi-pronged pursuit of sales
growth seen at Mondelez
NEW YORK - Shifting its focus away
from margin expansion is one of six strategic changes driving greater top-line
growth for Mondelez International, Inc.,
according to a Nov. 25 research publication
from New York-based Morgan Stanley.
Morgan Stanley maintained an overweight stock rating on Mondelez International, Deerfield, Ill., after recently meeting with top executives, including Dirk
Van de Put, chief executive officer. Morgan Stanley gave a price target of $60 per
share for Nov. 19, 2020, which compared
to Mondelez's share price of $51.80 on the
Nasdaq on Nov. 19, 2019. Morgan Stanley
forecast organic top-line growth of about
3.5% and EBIT growth of about 5.5%.
Mondelez's shift to top-line growth
particularly emphasizes volume growth
relative to a historical price-driven topline growth, according to Morgan Stanley. The other five strategic changes are
shifting toward a more country-based approach, changing incentive compensation
to emphasize volume growth and gross
profit growth rather than gross margins,
increasing focus on local brands that

historically were de-prioritized versus
global brands like Oreos and Cadbury, being more effective with marketing, and reinvesting in advertising/marketing, digital capabilities, new product development,
and routes to market.
Top-line growth year to date
in 2019 stood at 4.2%, which
compared with 2.3% in 2018
and 0.8% in 2017. A stronger
Easter execution and a favorable cycling of the heat wave
in Europe in 2019, which hurt
chocolate sales in 2018, had
MONDELEZ
positive impacts on year-todate sales this year, according to Mondelez. Morgan Stanley expects to see
organic sales growth ending up at about
3.5% in 2019 as top-line growth in the
fourth quarter should not be as strong as
in the first three quarters.
In the United States, Mondelez sales
growth was 2.5% year to date in 2019,
which compared with 1.3% in 2018 and a
decline of 0.7% in 2017. Solid pricing supported market share gains for Mondelez,

AIB International to stop lab
testing, recommends Great Plains
MANHATTAN, KAS. - Manhattanbased AIB International will stop accepting samples for analytical laboratory testing on Dec. 1 and is recommending Kansas
City-based Great Plains Analytical Laboratory for its clients who are looking for
a new laboratory for testing. Great Plains

Analytical Laboratory will host a free online session at 10:30 a.m. central standard
time Dec. 4 that will give more detail on
the company, a privately held, employeeowned laboratory founded in 1993.
AIB International plans to focus more
on consulting and training services for its

Ingredion issues alert with S.E.C. on
computer malware finding
WESTCHESTER, ILL. - An external security vendor has detected another strain
of malware on the computer systems of
Ingredion, Inc., the Westchester-based
company said in an 8-K filing with the
U.S. Securities and Exchange Commission on Nov. 19.
The strain of malware could present a risk
to people who use Ingredion systems to access personal accounts or who have stored
personal credentials on their Ingredion system. Using a work computer for conducting
transactions on personal financial/banking
or e-commerce platforms would be examples, according to Ingredion.
Ingredion is not aware of evidence that
10 / December 3, 2019

Milling & Baking News

any employee personal information or
any Ingredion business information was
misappropriated. The company is working with the external vendor on the malware issue.
Ingredion initially reported computer
system security issues on Oct. 15 after detecting suspicious activity affecting several servers within certain data centers.
The company at that time was not aware
of evidence that any customer, supplier
or employee data improperly had been
assessed, misused or transferred by any
third party. Ingredion at that time also
began working with a third-party consultant on the issue. MBN

according to Morgan Stanley, which
pointed to U.S. price increases in categories like crackers, cookies and candy.
Mondelez is addressing weakness in its
U.S. gum business by expanding in the
mint segment.
Mondelez International will
keep an eye on opportunities
for mergers and acquisitions
with a focus on bolt-on acquisitions, according to Morgan
Stanley. The potential bolt-on
acquisitions could come in
three areas: geographical reinforcement by filling in white
space areas in certain markets,
expansion in the company's
current categories to gain exposure to growing sub-segments,
and brands that focus on health
and wellness, premium or digital.
Morgan Stanley pointed out Mondelez in 2019 has had problems in Brazil that included issues with production
and supply chain and weakness in the
powdered beverage business. The issues
with production and supply chain, which
were driven by Mondelez moving to two
manufacturing plants in Brazil from four,
should be resolved by the end of 2020, according to Morgan Stanley. MBN
global clients and this summer announced
plans to discontinue several services at its
Manhattan headquarters, including some
research and development services like
pilot plant testing and analytical lab services. Online learning has become more
popular, and client companies are seeking
customized programs at their work sites,
according to AIB International.
Great Plains Analytical Laboratory provides a range of services, including proximate analyses, physical dough testing,
bake testing and product evaluation, grain
and flour analyses, physical tests, mycotoxins, pesticide residues, microbiology, shelf
life studies, and nutritional labeling. MBN

Continental
stake in Alico
unchanged
NEW YORK - Continental Grain
Co. did not recently increase its
stake in Alico, Inc. An article in the
Nov. 19 issue of Milling & Baking
News stated Continental had acquired more than 3 million shares
of Alico, which is based in Fort
Myers, Fla. MBN
bakingbusiness.com / world-grain.com

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - December 3, 2019

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