Cadbury owner Mondelez says cost-of-living pressures ‘incredibly real’ for consumers

The Australian chief of Cadbury owner Mondelez says consumers are definitely feeling the squeeze but slowing inflation and potential interest rate cuts could soon bring relief.

Darren O’Brien, the boss of Mondelez International Australia and who oversees one of the largest confectionery and snacks brands portfolios in the country, says cost of living pressures are “incredibly real”, but hopes moderating inflation and a possible interest rate cut this year will relieve households and boost the economy.

Mr O’Brien, whose popular brands include Cadbury, Toblerone, Oreo cookies and Philadelphia cream cheese, said that amid financial stress consumers were heavily value conscious as they walked the supermarket aisles.

But added that there was still room for treats and snacks within many household budgets.

“I think people have become quite value conscious,” Mr O’Brien said, as the consumer brand giant also announced a fresh recycling initiative with packaging group Amcor.

“We think it’s very important, and at the heart of Cadbury’s generosity, is to make sure that people can have affordable treats – whether that’s Oreo cookies or Cadbury chocolate.

“We think that if people do have to make trade-offs in other areas, things they would prefer to do, we want to make sure that one thing they don’t have to trade off is the ability to treat themselves or treat their family.”

Mr O’Brien said the cost-of-living pressures are “very real” but that relief could be at hand if rates were cut later this year.

“I think the cost-of-living pressures are incredibly real. And whether they’re coming through prices at the supermarket, whether they’re coming through prices to energy, whether it’s been increased interest rates, or the price of fuel … the cost-of-living pressures are very real.

“I think consumers have still proven to be fairly resilient. But there’s no doubt choices have been made whether it’s by shying away from some premium segments and whether it’s actually trading off some of those segments.

“I hope that the latest inflation data, which has shown a decrease, and the talk that there may be interest rate relief coming as early as August is going to provide some relief, as well as confidence to consumers.”

Cadbury aims to use around 50 per cent recycled plastic. Picture: Wayne Taylor

It comes as Mondelez’s flagship consumer brand Cadbury recently signed a deal with Amcor to source about 1000 tonnes of post-consumer recycled plastic to wrap its core Cadbury chocolate range, accelerating the company’s ambitions to reduce its virgin plastic needs. The volume of recycled plastic that will be sourced from Amcor would be enough for around 500 million family blocks of Cadbury dairy milk chocolate.

In 2022, Cadbury announced it had sourced 30 per cent of the plastic needed to wrap its 160g to 185g Cadbury dairy milk family blocks produced in Australia from recycled materials. With its latest purchase, Cadbury aims to use around 50 per cent recycled plastic for its wrappers across its chocolate blocks, bars and pieces range produced in Australia. This will be equivalent to halving its virgin plastic needs to wrap those products.

The rollout of recycled material is expected to begin in the first quarter of 2024, starting with blocks and expanding into bar lines such as Cherry Ripe, Crunchie and Twirl as well as wrappers for Roses and Favourites.

“Reducing virgin plastic use and supporting a circular packaging economy is a focus for our business and this latest deal to purchase recycled plastic is another important step in our journey. By creating confidence in the market for recycled material, we’re helping to build a future for plastic recycling in this country.”

Mondelez has also upped its sourcing of local product and services by 46 per cent since 2019 and has made manufacturing investments of $402m in the past four years.

Originally published as Cadbury owner Mondelez says cost-of-living pressures ‘incredibly real’ for consumers