Mondelēz International makes and sells snack foods that people eat and then buy again. Oreo cookies, Cadbury Dairy Milk chocolate, Ritz crackers, Milka, Toblerone, Clif Bar, these are the brands. The company sells in over 150 countries and runs 145 manufacturing facilities across 49 countries. Three quarters of its revenue comes from outside the United States. When someone finishes a pack of biscuits or a chocolate bar, they go back to the store and buy another one. That repeat purchase, multiplied across billions of consumers, is how Mondelēz earns its money. The diagram below traces where that money goes.
How Mondelēz International Makes Money
flowchart TD
A["Global Brand Portfolio
Oreo, Cadbury, Ritz, etc."] --> B["Product Manufacturing
145 facilities, 49 countries"]
B --> C["Distribution Network
Direct, warehouses, retailers"]
C --> D["Product Sales
38.5 billion dollars"]
D --> E["Gross Profit
28.4% margin"]
E --> F["Operating Expenses
Marketing, R&D, labor"]
F --> G["Operating Income
9.2% margin"]
G --> H["Cash Generation
3.2 billion dollars free cash"]
H --> I["Growth Investment Loop"]
I -->|"Brand marketing & innovation"| A
I -->|"Supply chain optimization"| B
D -->|"75.8% from non-U.S. markets"| C
E --> J["Reinvestment in Categories
Chocolate, biscuits, snacks"]
J --> A
Five years of financial data tell a story of steady growth interrupted by a sharp squeeze. Revenue climbed from $28.7 billion in 2021 to $38.5 billion in 2025. That is genuine expansion. But the gross margin, which measures how much of each dollar of sales the company keeps after paying for ingredients and production, tells a more complicated story.
Gross Margin (%) by Year
Gross margin held near 39% for three years, dipped in 2022 under cost pressure, recovered, then collapsed to 28.4% in 2025. Source: XBRL filings.
The margin recovered through 2023 and 2024 as the company raised prices. Then in 2025 it dropped sharply to 28.4%, the lowest in this five-year window. The company flagged one ingredient above all others as the cause: cocoa. Cocoa prices rose dramatically, and chocolate is one of the company's most important categories. The company said it expects cocoa costs to remain elevated compared to historical levels in the near and medium term, even if they ease somewhat in 2026.
How Commodity Costs Hit Margins
A commodity is a raw material like cocoa, wheat, or sugar. When a company like Mondelēz needs huge amounts of these ingredients, a price spike hits its costs immediately. The company can try to raise product prices to compensate, but customers may buy less if prices go up. The gap between what it costs to make a product and what the company charges for it is called the gross margin.
Operating cash flow stayed positive across all five years, ranging from $3.9 billion to $4.9 billion. Free cash flow, the money left after spending on factories and equipment, ranged from $3.0 billion to $3.6 billion in the middle years. In 2025 it came in at $3.2 billion. That means the business kept generating real cash even as margins were being squeezed. Debt is a different concern. Net debt stood at $15.7 billion at the end of 2024, but rose to $19.9 billion by end of 2025.
$38.5B
2025 net revenues, the highest in the company's five-year reported history
Revenue growth has been real, but much of it came from price increases rather than selling more units. In 2025, pricing contributed 8.0 percentage points to organic revenue growth while volume and product mix shrank by 3.7 percentage points. In plain terms: customers bought less, but paid more per item. That works until customers decide the price is too high and switch to a cheaper store brand, or simply cut back.
2025
crisis
Cocoa Costs Collapse the Gross Margin
In 2025, a global shortage of cocoa pushed raw material costs sharply higher. Mondelēz's gross margin fell from 39.1% in 2024 to 28.4% in 2025. The company responded with price increases, but those increases caused customers to buy less volume. The company acknowledged that elevated cocoa costs compared to historical levels are expected to continue in the near and medium term.
The documented risks facing Mondelēz are specific and serious. Cocoa is the most immediate. The company's chocolate products depend on it, and global cocoa supply has shrunk due to climate and farming challenges while prices have surged. This is not a temporary blip the company can easily hedge away. Separately, new United States tariffs on imported goods and ingredients add costs across a business that moves products and materials across dozens of borders. Other countries have retaliated with their own tariffs on American goods, making the global trading environment harder to navigate.
What a Tariff Does to a Global Food Company
A tariff is a tax charged when goods cross a border. If a country raises tariffs, imported ingredients or finished products cost more. For a company that operates in 150 countries and ships ingredients around the world, tariff changes in even one major market can raise costs significantly. When other countries retaliate with their own tariffs, the problem compounds.
Russia is another live risk. The company has kept operating there because it says it plays a role in food supply, and because it has more than 2,500 employees in the country. Russia generated 3.7% of 2025 revenue. The company is clear that it cannot predict whether this will continue, and that its Russian assets could be lost to expropriation or forced exit. Ukraine, where two factories were significantly damaged during the war, generated 0.4% of 2025 revenue.
3.7%
Share of 2025 revenue from Russia, a market where the company could lose assets or be forced to exit
Large grocery retailers are also a growing pressure point. As supermarket chains merge and grow bigger, they gain more power over suppliers. They can demand lower prices or threaten to give shelf space to their own cheaper store brands instead. Mondelēz noted this directly as a medium-severity risk. On top of all this, the company approved $1.2 billion in spending to upgrade its global business management software systems, with completion expected by the end of 2028. That is money being spent before the benefit arrives.
In 2021, eight former child slaves from Mali filed a lawsuit against Mondelēz, alleging the company knowingly allowed forced labor on cocoa farms. Separately, investigations in 2017 linked the company's cocoa sourcing to illegal deforestation in protected areas of West Africa. These legal and reputational issues around cocoa sourcing remain part of the public record and have not been fully resolved.
Private Label: The Store Brand Threat
Private label means products made by a retailer under its own brand name, like a supermarket's own-brand biscuits. These are usually cheaper than branded products. When ingredient costs go up and branded companies raise prices, some shoppers switch to the store brand instead. This puts pressure on companies like Mondelēz to either hold prices down or risk losing customers.
The company is also running a $1.2 billion technology upgrade over several years to replace its core business systems. This adds costs now, with the payoff expected later. Combined with rising debt levels and sustained cocoa cost pressure, the near-term financial picture is more strained than the revenue line alone suggests.
$19.9B
Net debt at end of 2025, up from $15.7B at end of 2024
The Bet
Mondelēz's financial logic holds if iconic global snack brands, Oreo, Cadbury, Milka, Ritz, remain strong enough that consumers keep choosing them over cheaper alternatives, even as prices rise. The company has pushed prices up significantly to cover higher cocoa and other ingredient costs. If consumers in its biggest markets accept those higher prices and come back to branded snacks once cost pressures ease, margins recover and the cash engine stays intact. If cocoa costs stay elevated for longer than expected, or if enough consumers permanently switch to store brands during the price spike, the margin recovery the whole model depends on does not arrive on schedule.
Open question
Mondelēz has grown revenue steadily, holds genuinely global brands, and kept generating cash even through a painful cost squeeze. But its gross margin fell to 28.4% in 2025, volume is declining as prices rise, net debt has climbed, and cocoa costs are expected to stay high for the foreseeable future. Can brands like Oreo and Cadbury hold enough consumer loyalty to survive sustained price increases, or is this the moment when shoppers decide that a cheaper biscuit tastes good enough?
Compiled · 10-K · FY2025
