Emerging Markets Key to Kraft Spinoff’s Success

Food manufacturer Kraft’s spinoff company Mondelez expects growing demand for snacks in the developing world to be pivotal to the company’s success.

The Acure vending machine uses facial recognition to recommend drinks to buyers.
The Acure vending machine uses facial recognition to recommend drinks to buyers.

“Forty-four percent of our revenue will come from the emerging markets, benefiting from the growth there,” Tim Cofer, Europe president at Mondelez International said.

Mondelez International was created as the chocolate and confectionary arm of Kraft following a demerger. Mondelez, new home to brands such as Cadbury and Milka, will focus on the snacks business, while Kraft will maintain its focus on the broader food market.

Mondelez will be in a prime position to benefit from a marked change in the world’s eating habits, Cofer told CNBC’s “Squawk Box Europe” on Tuesday.

“Snacking is a behavior that is growing, and we have a strong leadership position in this area. Snacking categories are growing much faster than non-snacking businesses, and it’s a great position to be in.”

Approximately 37 percent of revenue will come from Europe and less than 20 percent from North America, he added. Cofer is particularly keen to expand the company’s presence in the BRIC countries – Brazil, Russia, India and China.

“In China we have an over $800-million business dominated by biscuits, and Oreo is the number one biscuit in China [right now],” he said. The global heft inherited from Kraft stable will allow Mondelez to maintain its drive to becoming the number one brand in key countries.

The spinoff will help investors hone their interests more specifically to either confectionary or general food. Earlier this year Kraft moved its listing away from the New York Stock Exchange and onto the Nasdaq for financial and better visibility reasons.

Cofer said the name of the company came from Mond, the Latin word for world, and Delez meaning delicious. The company will be based in Zurich, Switzerland.

“It’s a compelling growth story and we have everything it takes to win even in this challenging environment,” he said.