Cadbury owner back in black

AUCKLAND: Cadbury owner Mondelez New Zealand is tightening its belt as it braces for the coming downturn, despite coming through the Covid19 lockdown in good heart.

The New Zealand arm of the food giant raced around the clock to keep supermarkets stocked during the lockdown, getting a strong sales boost in the June quarter. However, it has one eye on the looming recession, and is putting off projects and cutting expenses in preparation.

‘‘What we had to do was take a look at our backhalf plan and make a choice to simplify,’’

Mondelez NZ chief executive Cara Liebrock said.

The company — which pulled out of manufacturing in Dunedin in 2017 and laid off 350 people — whose local brands include Cadbury, Pascall, Oreo, Ritz, and Philadelphia cream cheese, did not take the wage subsidy and was classified as an essential service during the lockdown.

Ms Liebrock said sales were strong in that period as consumers bought bigger chocolate blocks rather than individual bars. The company has a 37% share of the chocolate market and 32% of lollies.

She would not provide details, but grocery sales have been strong across the country. Countdown supermarket sales were up 15.1% in the 10 weeks ended June 14 compared with the same period last year.

Even Easter was well celebrated: $20.7 million worth of chocolate sold in the two weeks to Easter Sunday, just 0.5% lower than in 2019, according to

Nielsen Scantrack data.

Mondelez New Zealand Investments’ financials show the company is back in the black after two years of losses. In calendar 2019, it reported a net profit of $2.5 million, turning around a loss of $6.3 million in 2018. That was achieved despite a revenue decline of 3.4%.

Ms Liebrock was coy about the current year’s prospects.

‘‘I’m cautious to quote a number, but it’s fair to say we’ve had some really good growth coming out of quarter two despite a mix across channels and, in the balance of the year, we have to manage costs,’’ she said.

Mondelez’s local unit was deferring major projects and cutting expenses in preparation for the upcoming downturn, but it had not made redundancies.

The firm recently brought merchandising back in house, adding 100 new roles and following on from 12 more callcentre staff it added last year.

‘‘Even though we don’t have manufacturing, we are still for the local market and have to drive the bigger innovations,’’ Ms Liebrock said. — BusinessDesk