Mondelez International, Inc. (MDLZ): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at Mondelez International, Inc. right now, and honestly, the picture is complex: you have a snack giant with iconic brands that pulled in about $36.4 billion in revenue in FY 2024, but they are navigating some serious headwinds as of late 2025. We need to cut through the noise and see how the five forces are truly shaping their margins, especially with unprecedented cocoa cost inflation giving suppliers serious leverage and large retailers pushing back on price, causing a volume dip in North America this year. Before you finalize your view on this business, you'll want to see the full breakdown of where the real pressure points are-from the threat of health-focused substitutes to the massive barriers keeping new competitors out-to understand the path forward for this portfolio.

Mondelez International, Inc. (MDLZ) - Porter's Five Forces: Bargaining power of suppliers

The bargaining power of suppliers for Mondelez International, Inc. is significantly elevated, primarily driven by extreme volatility and scarcity in key agricultural inputs, most notably cocoa. This force is a major determinant of profitability for the company, which derives 31% of its sales from chocolate as of the end of fiscal 2024.

High power due to unprecedented cocoa cost inflation in 2025.

The cost pressure from cocoa suppliers reached a critical point in 2025. Mondelez International, Inc. warned in February 2025 of a 10% drop in adjusted earnings per share (EPS) due to these spikes. By the third quarter of 2025, the company updated its full-year outlook, now expecting adjusted EPS to decline approximately 15% on a constant currency basis. The CEO noted that the third quarter of 2025 represented the peak for these costs.

The impact on gross profitability was stark:

Cocoa prices hit a 60-year high in 2025, pressuring chocolate margins.

The market saw cocoa prices reach a 60-year high in early 2025, peaking at $10.75 per kilogram on January 31, 2025. This surge followed a near-threefold increase between late 2023 and early 2025. While prices moderated by late November 2025 to around $4,900 per tonne (or $4.90/kg), this was still a volatile environment following the extreme highs. The raw material cost inflation was reported to be approximately 91% year-over-year at one point in 2025.

Dependence on volatile global commodities: cocoa, sugar, and wheat.

Mondelez International, Inc. relies on several global commodities whose prices are subject to significant swings. The company uses hedging to manage these inputs, which include:

• Cocoa
• Sugar
• Wheat
• Dairy
• Oils (e.g., palm and other vegetable oils)

For context on sugar, a key ingredient, the price on November 26, 2025, was $15.12.

Supplier concentration is low, but commodity scarcity increases leverage.

While the overall supplier base for many ingredients may be fragmented, the concentration in the primary growing regions for cocoa grants significant leverage to those suppliers. Ivory Coast and Ghana together account for more than 60% of the world's cocoa output. This geographic concentration, coupled with production deficits-the 2023-24 season saw a deficit of 478,000 metric tonnes-translates scarcity directly into supplier power.

Hedging strategies provide temporary protection against price shocks.

Mondelez International, Inc. actively uses financial instruments to mitigate input cost volatility. The company deploys hedging techniques to limit the impact of fluctuations in the cost of its principal raw materials. In 2025, the company specifically deployed financial hedging strategies to provide partial protection against the steep rise in cocoa costs. Historically, the company expanded its portfolio of commodity derivatives to $10.45 billion in notional value by the third quarter of 2022, demonstrating a commitment to this risk management tool.

Mondelez International, Inc. (MDLZ) - Porter's Five Forces: Bargaining power of customers

The bargaining power of customers for Mondelez International, Inc. (MDLZ) remains a significant factor, largely dictated by the structure of the retail landscape and the evolving price sensitivity of the end consumer. You see this dynamic play out clearly in the North American market, which is dominated by a few very large, consolidated retailers.

Moderate to high power from large, consolidated retailers (e.g., Walmart).

When major retailers hold significant shelf space and volume, their ability to dictate terms, inventory levels, and promotional support increases substantially. This power was evident in the first half of 2025. Retailer actions directly impacted Mondelez International's top-line performance, showing that the channel partners can exert considerable influence over the manufacturer's immediate results.

Retailer destocking caused a volume decline in North America in H1 2025.

We saw direct evidence of this channel power. In the first quarter of 2025, North America revenue declined by 3.6%, which management explicitly attributed primarily to retailer destocking in the U.S.. This pattern continued into the second quarter, where North America revenue fell 3.5%, again citing U.S. retailer destocking and soft consumption as the main drivers. Even by the third quarter, organic sales in North America were down 0.3%. This shows that when key buyers decide to reduce inventory, it immediately translates into lower reported volumes for Mondelez International.

To put the impact of these volume pressures into context, here is a look at the recent quarterly performance in North America versus the global picture:

Strong, iconic brands like Oreo and Milka grant pricing power to Mondelez International.

Despite the retailer pressure, the inherent strength of the portfolio provides a necessary offset. You can't easily substitute an Oreo or a Milka bar when a consumer has a specific craving. CEO Dirk Van de Put noted that loyalty to brands like Oreo, Chips Ahoy, and Ritz remains solid in North America. Furthermore, in Q2 2025, brands such as Cadbury Dairy Milk, Milka, Lacta, Cote d'Or, Freia/Marabou, and Hu all posted double-digit revenue increases. This brand equity allowed Mondelez International to execute strong pricing, with global pricing up +7.1 percentage points in Q2 2025. This pricing power is what kept organic revenue growing even as volumes fell.

Consumers are sensitive to pricing, leading to unfavorable volume/mix.

Consumers are definitely feeling the pinch from cumulative price increases, which have been substantial, especially in chocolate. Globally, the company noted that consumers are 'very concerned about the economy' and 'frustrated with the pricing they're seeing'. This sensitivity directly causes volume erosion. The overall global volume/mix declined 3.5% in Q1 2025 due to expected price elasticity. In Q3 2025, the volume decline worsened to 4.6% globally. We are seeing clear trade-downs, with lower-income households prioritizing essentials and seeking specific basket sizes.

Mondelez International uses Price Pack Architecture to maintain affordable price points.

To counter this consumer pushback without completely sacrificing revenue growth, Mondelez International is actively adjusting its product offerings. They are using what's called Price Pack Architecture (PPA), which is essentially managing the size and price of the package to hit specific consumer price thresholds. Management noted they are focused on growing the size of their lower-priced portfolio and expanding in multipacks in North America. The company is also employing 'shrinkflation,' reducing product volume to keep certain pack prices below key psychological thresholds of US$3 and US$4. This strategy is a direct response to customer sensitivity, attempting to keep the product accessible even as input costs, like cocoa which saw futures lose 50% from their December 2024 peak, fluctuate.

Finance: draft 13-week cash view by Friday.

Mondelez International, Inc. (MDLZ) - Porter's Five Forces: Competitive rivalry

You're looking at the core of the snack food industry's battleground, and for Mondelez International, Inc., competitive rivalry is definitely the most intense force at play. This market doesn't offer easy wins; it demands constant, high-stakes maneuvering against established titans.

The rivalry is fierce because the key players are global giants with massive scale and deep brand loyalty. Mondelez International, Inc. operates in the same space as behemoths like Nestlé, PepsiCo, and Hershey. To put this into perspective, consider the scale:

Even with a TTM revenue of $37.645 billion as of September 30, 2025, Mondelez International is positioned right in the middle of the pack among its top rivals, meaning every point of market share is hard-fought. The market itself is mature, so growth isn't coming from new category creation; it's coming from taking share, which forces competition onto the fundamentals: price, shelf space, and new product excitement.

This maturity means that pricing power is constantly tested. Look at the FY 2024 results: Organic Net Revenue Growth was 4.3%, but this was heavily reliant on pricing, as the Volume/Mix component actually declined by -1.0%. That's the market telling you consumers are sensitive, and Mondelez International is pushing prices to maintain top-line momentum.

Still, Mondelez International is making significant, forward-looking bets to gain an edge in efficiency and creative output. They are investing heavily in technology to outmaneuver slower competitors. Here are the specifics on that strategic push:

• Investment in generative AI platform: $40 million.
• Expected reduction in marketing content production costs: 30% to 50%.
• Initial AI deployment for social media ads (e.g., Chips Ahoy, Milka).
• Target for short TV ads using AI: Holiday season 2026.
• Aspiration for a Super Bowl spot using AI: 2027.

The competitive set isn't just the giants, either. You have to factor in the persistent threat from private label brands, which often compete aggressively on price, and smaller, niche snack players who can capture specific, high-growth consumer trends faster than a large organization can pivot. Mondelez International's ability to deploy capital-like the $4.7 billion returned to shareholders in FY 2024-while simultaneously investing in future efficiency, like the AI bet, is what keeps it in the fight.

For context on recent performance against the backdrop of this rivalry, consider these key financial markers from the latest full fiscal year:

• FY 2024 Net Revenues: $36.441 billion.
• FY 2024 Diluted EPS: $3.42.
• FY 2024 Free Cash Flow: $3.5 billion.

The FY 2025 outlook, as of early 2025, suggested organic revenue growth of about 5%, but also a challenging expected decline in Adjusted EPS of approximately 10%, showing the margin pressure from input costs and competitive pricing battles.

Mondelez International, Inc. (MDLZ) - Porter's Five Forces: Threat of substitutes

The threat of substitution for Mondelez International, Inc. (MDLZ) remains a dynamic factor, driven by significant shifts in consumer health consciousness and the emergence of new pharmacological influences on appetite.

Moderate to High Threat from Health and Wellness Movement

You are definitely seeing a sustained pressure from the 'better-for-you' movement, which directly challenges the core indulgence proposition of many Mondelez International, Inc. products. This isn't just a niche concern; it's influencing purchasing premiums across the board. For instance, data from 2025 indicates that 71% of US consumers are prepared to pay more for products that feature transparent, natural components. Mondelez International, Inc. is actively responding, launching clean-label, plant-based snacks through its SnackFutures hub in 2025 to capture this evolving demand. Still, the overall category volume in some regions, like the US, saw a dip, with Mondelez International, Inc. reporting a 4.1% net revenue drop in North America in Q1 2025, partially attributed to consumers shifting spend toward grocery staples like meats and eggs. Snacking, however, remains deeply embedded, with 91% of global consumers in Mondelez International, Inc.'s 2024 State of Snacking report indicating they snack daily.

Growing Demand for Healthier Alternatives

The market for specific health-aligned substitutes is expanding rapidly, representing a clear avenue for substitution away from traditional offerings. The focus on 'free-from' products, such as organic and gluten-free options, shows substantial financial scale. Here's a quick look at the relevant market sizes for 2025, which shows the scale of the substitute landscape:

The gluten-free bakery product segment registered the maximum market share in 2024 within the broader gluten-free products market. This trend shows that consumers are actively seeking substitutes that align with perceived health benefits, even outside of diagnosed medical necessity.

Long-Term Threat from Weight-Loss Drugs (GLP-1s)

The rise of GLP-1 weight-loss drugs presents a potential, though currently long-term, substitution risk, particularly for high-indulgence, calorie-dense items like chocolate confectionery. Mondelez International, Inc.'s CEO, Dirk Van de Put, has acknowledged monitoring this trend, though he has characterized the immediate concern as overblown. Based on projections cited by the company in late 2023, the potential impact is estimated to be a volume effect of only 0.5% to 1% ten years down the road. However, the effect may already be visible in specific categories and regions. For example, in Europe, confectionery engagement has seen declines year-on-year, with Spain down 11.21% and Germany down 9%, which some analysts speculate could be linked to appetite-suppressing medication use.

Mitigation via Cakes and Pastries Expansion

Mondelez International, Inc. is strategically countering substitution risk by aggressively expanding into the cakes and pastries category, which is seen as a growth runway. This segment is substantial, estimated to be a $97 billion market in 2025, up from an estimated $73 billion in 2024. The company currently holds the No. 3 position globally in this segment. This move helps diversify the portfolio away from categories facing higher substitution pressure. The company's organic net revenue growth was 5.6% in Q2 2025, showing that its overall strategy is delivering top-line momentum despite headwinds.

• Mondelez International, Inc. aims for 90% of revenue from chocolate, biscuits, and baked snacks.
• The company returned $3.7 billion to shareholders via dividends and buybacks in the first nine months of 2025.
• 2025 Free Cash Flow is expected to be over $3 billion.
• The cakes and pastries business is valued at approximately $2 billion within the company's portfolio.

Lower Substitution for Core, Highly-Addictive Products

For its most iconic, highly-addictive core products, the threat of immediate substitution remains comparatively lower. Products like Oreo benefit from deep brand equity and established consumption rituals. While the overall chocolate segment has experienced lower demand, the company is still seeing resilient consumer demand in snacking, even after implementing significant pricing actions. The resilience of these core brands provides a stable base against which the company can manage the growth in substitute categories.

Mondelez International, Inc. (MDLZ) - Porter's Five Forces: Threat of new entrants

The threat of new entrants for Mondelez International, Inc. in the global snacking arena remains decidedly low, primarily because the barriers to entry are exceptionally high, demanding capital and infrastructure only a few players can muster. You can see this clearly when you compare the scale required to compete globally versus the cost to start small.

Low threat due to extremely high capital requirements for global scale.

Entering the global market requires capital expenditure that dwarfs the initial investment for a local operation. While starting a small, home-based snack business might cost around $10,000, establishing a large-scale production facility capable of challenging Mondelez International, Inc. requires $250,000+, and that is just for one facility, not a global footprint. Mondelez International, Inc. itself reported Total Assets of $68.5 billion as of 2024, illustrating the sheer financial muscle needed to sustain operations, let alone challenge an incumbent. Furthermore, raw material costs, a major component of production, can account for 50-60% of a snack manufacturer's total costs, meaning a new entrant must secure massive, stable, and cost-effective supply chains from day one.

Massive barrier to entry from establishing a distribution network across 150+ countries.

Mondelez International, Inc. serves customers in over 150 countries. Replicating this reach is perhaps the single greatest hurdle. A new entrant must negotiate shelf space, manage complex logistics, and comply with varied regulatory environments across these geographies. To put the distribution challenge into perspective, for smaller snack lines, the established value of a distribution channel is often benchmarked at $1,000 to $3,000 per active retail account. Scaling this metric across thousands of potential retail partners in over 150 countries represents an investment barrier in the billions, not millions.

Need for large-scale investment in manufacturing and supply chain infrastructure.

The necessary infrastructure investment is staggering. Mondelez International, Inc. generated Net Revenue of $36.44 billion in fiscal year 2024, indicating the required scale of manufacturing capacity to support such a top line. Even looking at a single quarter, Q2 2025 Net Revenue was $8.98 billion. A new entrant must build or acquire manufacturing capacity that can handle this volume while simultaneously managing the high input costs, such as the recent surge in cocoa prices that Mondelez International, Inc. has been navigating.

Here's a quick look at the scale difference:

New entrants struggle against Mondelez International's deep brand equity and consumer trust.

Brand equity acts as a powerful moat. Mondelez International, Inc. owns iconic brands like Oreo, Cadbury, and Milka. These brands have decades of consumer trust built in, which translates directly into pricing power. For example, in Q2 2025, Mondelez International, Inc.'s growth was significantly driven by pricing, with chocolate category prices reportedly up 30% to 50% in the past two years. Consumers accept these increases because of the established brand value. New entrants lack this history, forcing them to compete on price, which erodes margins, or spend heavily on marketing to build awareness.

In 2024, Mondelez International, Inc. held market shares such as 21% in Biscuits and 16% in Chocolate globally. Gaining even a small percentage point from these established segments requires overcoming deeply ingrained consumer habits.

• Brand equity secures shelf space.
• Trust supports premium pricing strategies.
• Loyalty dampens price elasticity effects.
• Established brand recognition drives trial.

Threat is definitely higher in local and niche segments that require less initial scale.

While the global stage is protected, the threat level rises considerably in smaller, local, or niche segments. A local entrepreneur can start a specialized, artisanal snack line with a much lower capital outlay, perhaps only needing to secure local health permits and a small commercial kitchen, costing far less than the $250,000+ required for a large facility. These smaller players can target specific, underserved local tastes or health trends where Mondelez International, Inc.'s massive portfolio might be too generalized. However, the path to scaling beyond a regional success story still runs into the distribution and capital barriers that protect the core business of Mondelez International, Inc.