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Myth: Sales Of Snacks Rise In Uncertain Times

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Myth: Sales Of Snacks Rise In Uncertain Times

Sales of snacks and junk food tend to rise during times of uncertainty, right? According to one of the world's largest snack makers, this is not the case at all.

According to CNNMoney, Mondelez International Inc (NASDAQ: MDLZ), the parent company behind Oreo and Cadbury snacks, said during its fourth-quarter conference call that consumers are very nervous and this isn't translating into a boost in sales as one would expect.

Mondelez's CEO Irene Rosenfeld said during the conference call that consumers across the world are worried about sluggish economic growth, rising commodity prices and even highlighted country specific concerns, such as Brexit and India's decision to eliminate two of its paper currency notes.

Rosenfeld said the impact from these events is being felt by many companies, and the snack maker isn't immune.

Trouble At Home

U.S.-based Mondelez generates around three quarters of its sales in the international market; the remaining one quarter in domestic sales certainly faces the same sets of challenges.

"As we look at the global landscape for 2017, we do expect continued economic and geopolitical uncertainties, especially in the emerging markets, but also in places like the U.S.," Mondelez's chief financial officer Brian Gladden added.

Meanwhile, Mondelez isn't going to make any changes to its business — for the simple reason that there is nothing it can do. Gladden also said in the conference call the company can't make any changes to its operations until there is a greater degree of clarity from Washington.

Gladden did, however, state that the company has no plans at the moment to move any additional production to Mexico.

The Trump Diet: No Oreos

President Donald Trump is known for enjoying snack foods and indulges in PepsiCo, Inc. (NYSE: PEP)'s Lays potato chips and Kellogg Company (NYSE: K)'s Keebler Vienna Fingers. However, he no longer eats Oreos after Mondelez moved an Oreo plant to Mexico.

 

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