Mondelēz CEO: We're Questioning Our Future UK Investment

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0:30Dirk Van de Put:Stop by your local Menards today.

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1:20Hello and welcome to the Big Boss Interview Podcast. I'm Will Bain and today, Leanna Burn is making her debut on the Big Boss Interview Podcast. How do you find it? That's great. I had a great time. Yeah, well, no doubt. Because you had a really interesting guest. The company name might not mean a lot to people, but some of their brands are like Cadbury's, Oreo, Toblerone. Definitely things that I think are in a lot of our listeners' households, I'm sure. Yeah, listen, we've indulged in it all. I've definitely indulged in it all. So I've been speaking to Dirk van der Poet. He's the CEO of Mondelez International.

1:54And it comes at an interesting time for the company because whenever something happens in the global economy, a huge company like that is affected by it all. So we're talking inflation, wars, cocoa prices. We get into all of that. Interestingly, about the UK, Mondelez is feeling a little bit left out because it has not been included in the industrial strategy. So the food industry hasn't been included in the industrial strategy. And also it feels like all these new regulations is to do with advertising and also what the ingredients and trying to make these snacks that they make a lot healthier.

2:29It says that the regulation can be a bit too much for the business, that they have to shift and change and invest a lot in reformulating these snacks. So it can be quite tough. And they're actually, you know, kind of saying, if this continues on, then maybe the UK is not necessarily the best place for us to invest. and also spoke about its European business, particularly Ukraine. That day even it said its facility in Ukraine had been hit by a strike and it's having to deal with things like that and having to rebuild that plant all the time when that happens in Ukraine. But then at the same time, it's still operating in Russia and he's having to make moral decisions as to whether or not to continue there.

3:06But he also realises that the tax that they pay in Russia, it is going to fund the war. So yeah, we covered a lot of ground. Another big trend that he's having to deal with too, right? And we've talked about this. You've done a lot of reporting around this. GLP-1 drugs, these jabs, things like Wigobi from Novo Nordisk, the impact that that is having on chocolate consumption. Yeah, it's interesting. He actually said it wasn't having a huge impact on his business. And the reason is, is because it's snacking. And so I said to him, actually, maybe snacking is quite good for you. GLPs might be quite good for you because they're small sizes.

3:42People are just going to continue to snack. So he says he hasn't seen necessarily a huge change for his business. However, he did say that people are looking, if they are snacking, for something a lot more healthy. And that's why he's been making acquisitions in that space. So you can hear all of that and more. Here's my interview with Dirk van der Poot, CEO of Mondelez International.

4:08Thank you so much for joining us and welcome to the Big Boss interview. Your story is really interesting because you actually trained as a vet in Belgium. That's quite a leap. Yes, yes. In fact, I started in Mars. I graduated as a vet and we were just talking about it while I was a student, with some friends, we started a pirate radio. I went into the army. We had obligatory army service. So I did that. And then as I was there, I saw Mars was advertising for a veterinarian to become the head of PR for their pet food division. Right, okay. So, and there really wasn't that many veterinarians with PR experience.

4:52I would think in Belgium. So I was lucky to get the job. And so instead of going into the veterinary direction, I ended up in the business direction. And so that's how it started, basically. Yeah, it was a couple of different avenues you could have taken. You could have become a vet. You could have become a radio host. You could be doing what I'm doing. No, I wasn't good at it. I was the guy in the background of the pirate radio. I was not allowed to be on the broadcast. And what was that first job like? What did you learn from that? What did you kind of get a sense of from working in a big food company?

5:23Well, the job was basically, in those days, to try to convince pet owners, veterinarians, the authorities, that pet food was good for your dogs and your cats. And so it was influencing, explaining. And so what I learned was from the scientific world, a vet, you're in your hospital, and so suddenly there was another world about dealing with people, talking to people, connecting. And I was really intrigued by it. I really liked it. And it was sort of different for me. And I enjoyed it. So I asked Mars, can I continue in this direction? Can I maybe study some marketing? because very intrigued. I knew nothing about the business world.

6:15I knew nothing about P &Ls or brand building or all that. So I said, can you maybe learn me that? And so they sent me to a postgraduate and then they put me in marketing and from there I went into sales and that's how I started to develop, mostly in the commercial direction of the business. Well, let's talk about the scale of Mondelieu's because I think maybe not everybody would necessarily know that name, but they'll know Cabaret, they'll know Oreos, or no Ritz or no Toblerone, Philadelphia, the list goes on. But, you know, you are feeding millions of people every day. What is it like running a company with that kind of reach?

6:50Yes, yes. I travel a lot. I think the best way to describe it is that you are in permanent conversations because my kids always ask me, but what do you actually do there? But my job is talking, talking with myself, thinking, talking and convincing people and following up and see how things are going. So that's the best way to describe it. The other big thing for me is organization. There's so many things going on and so many areas where you can get involved in to be very disciplined with your time and in the subjects you focus on. And then counting on the people, your team that works with you, that they will deal with the rest.

7:41That is a very big part of the job too. As it relates to, I mean, if you go into grocery stores or you go to India, for instance, and you see every little store in India has Cadbury in there, they don't ask, give me a chocolate, give me a Cadbury, they say. And so it's really exciting to see. Or when you come out with a new product and people love it, It's fun to see that. At the same time, when you get criticized, it hurts because you feel like you're the guy responsible. And so you take it very personally, I would say, when the company gets criticized for something. Is there an example that comes top of mind for you on that one?

8:24The discussion about food these days and the role of processed food, that's a tough one for me because I personally believe the world cannot live without processed food. We need to process our food. And the reason why food was being processed, because people for ages have been trying to conserve food, and so processing came because it helped people to keep their food for longer. If you look at it, we couldn't feed the world if there wasn't processed food. So I understand completely the discussion, like, we need to make it better every day, They make it healthier, see what we know now versus what we knew 10 years ago and do whatever we need to make it better.

9:07But it's being vilified a little bit at the moment. And I don't think it's completely fair. That would be one of the subjects. It's interesting that you say you kind of feel like it's almost a personal attack sometimes when you hear those debates. Yeah, it's because I think fundamentally this industry does a lot of good, not only on the employment side of things. and that we're a big company that helps a lot of people. But I think we provide also a lot of happiness and we're in snacking. And so it's a good moment for everybody. Do we try to do that in the best way possible? Yes, yes we do. And so to be sort of accused of not doing that, that is a thing that's tough for me.

9:52Can we do better? For sure. And I don't have a problem to have that discussion. But sort of a not nuanced discussion, that's tough. Sometimes. One of the things that struck me while I was preparing for the interview was that, you know, your business seems to be hit by every force shaping the global economy right now. So whether that's wars, tariffs, climate change, cocoa prices, regulation, even weight loss drugs, which I'm sure we'll talk about later. Yeah. How do you keep all of those plates spinning? I think my role is largely to look forward. My role is to make sure that the company five to ten years down the road is still doing well and recognize what are those factors that could be positive for us and then play on them, use them, build on them, or the ones that could be counter to what we're trying to do and make sure that the company is prepared for that.

10:44So that's my biggest filter for me. Now, in my team or the teams of my teams, it's different. There is something often about how do we do this month, how do we do next year. So it's a different focus for different people. Do I follow up on the day-to-day? Of course I do. But the main thing for me is like GLP-1s or weight loss drugs. Yes, following that up. What do we do about that? how is that going to affect our business? Cocoa, the cocoa supply chain for the next 10, 20 years, how do we as an industry? Those are the ones that I focus my attention on. Well, one supply chain disruptor, let's talk about war.

11:28We've had news that the US and Iran have signed a deal. I'd like to get your reaction to that because that is a disruptor, isn't it? When you've got supply chains and people might be listening and thinking, how would something like the Strait of Hormuz affect your business? But it does. Oh, yes, yes, it does. Well, it's a good thing in the first place. I hope it lasts and that there's genuine intent from both sides. It's basically related to oil. And if oil prices go up, you might not immediately realize that. But oil is in many, many things. The main thing that you will see in the grocery stores is packaging.

12:02Plastic packaging has a lot of oil in it. So if oil goes up, plastic packaging goes up. And I think consumers are already fed up with inflation over the last years. And so for us as a company, it's like, no, again, another thing that's going to go up. How are we going to explain this to the consumer? So that is one. But, for instance, oil is also in fertilizers. And so that means that the cost of any agricultural activity there is will go up. And so that's going to be a secondary effect. Of course, people see it at the pump when they go and fill up their car. So it might seem that this one war suddenly is going to have a worldwide impact.

12:41We studied it, and during the last big oil conflicts where oil price went up, you had a worldwide inflation of 4%, 5%. And so this is going to trickle everywhere. So hopefully there is peace, not only for the oil price, but for all the people involved. And it lasts, and oil prices start to come down because then the whole world will relax. And it's been going on a little bit too long that I think it might still take the best of this year before oil prices really come down. Back in February 2026, you said that after US and Israeli strikes on Iran, you briefly stopped production at your Bahrain manufacturing facility, which then resumed at reduced capacity.

13:24Is that still the case or how are you managing that? Yeah, I mean, it was so dangerous, and we are not too far away from an American military base, and we said, well, it could be that they misfire or so. So we sent everybody home, and we stopped the plant for about three weeks. We started importing our products into the Middle Eastern region, but now the factory has started working again. It's relatively safe. I would say we feel it's safe. And so it's up to normal production. But yeah, you have to sometimes make sure that everybody is safe because you never know. But if there would be any risk, we would immediately stop production again, of course, and try to bring it in from our other factories.

14:11But at this stage, it feels it's okay. We've had in Europe as well, quite similar issues with war and supply chain disruptions. Europe is your biggest market. So, you know, when you're at the center of so many shocks, when you've got war, energy prices, inflation regulation, has Europe become a more difficult place to do business? Yes, it is. Not only would I say it affects your supply chain, like we just discussed, and it affects also consumers. because consumers suddenly, I think consumer confidence around the world at the moment, how people feel about the future is amongst the worst that I've seen it in my career, and I've got a 30-year career.

14:54They don't feel good about the future. Suddenly there's war again. The Russia-Ukraine conflict keeps on going. Now we got this one. You got global inflation. So people don't feel good. And so that's a second effect that you get from all of this. It also affects the economy. So job security and job creation is starting to be affected. So it certainly has become much more difficult to do business. And if I reflect on that 30-year career, I would say this has been probably the toughest two years that I've seen. It might be because I'm now the CEO, but I've been the CEO now for 15 years. In the 15 years, for sure, this was the worst that I've seen it.

15:41If you think about everything that's been going on, it's quite extraordinary. Yeah, it has been quite an extraordinary couple of years. I think you had a very similar situation in Ukraine back in 2022 when you had to shut down production there. It is back open. But it's probably quite similar to Bahrain where you have a manufacturing facility there. It's open, but that's a country that's under attack. Yes, yes. I mean, in fact, I just got news this morning that our office building in the Ukraine got hit. Not everybody's safe. They're fine. It was on another floor. But yes, it's the reality of the situation.

16:21Our plant got hit. We have two plants there. One plant got hit twice. We've rebuilt it twice. First time it was real serious. Tens of millions of dollars of reinvestment. we've agreed that we will rebuild every single time there so we keep on investing in the country we we doubled everybody's salary when the conflict started and we have not fired anybody we at the moment when it was really bad we we evacuated women and children to neighboring countries and they stayed with our with our people in those countries so we've we're committed there But for the people that work there, it's, yeah, it's every day there's danger.

17:04And so it's very difficult for me to completely comprehend that, what it's like. I mean, being in the office and suddenly there's a drone attack, that's not something that we're confronted with all day to day. And I have to say for the people over there that are so dedicated to the company, I really appreciate that. Do you speak to them often? Yeah, yeah, of course. We have conversation about how things are going. But I think even if you talk to them, it's difficult to really imagine those circumstances. I guess on the flip side of that, Mandalay has chose to continue operating in Russia. Now, you suspended new investment in advertising there.

17:44But you argued at the time that leaving could simply hand assets to Putin-linked interests. Do you still believe that that was the right decision? And do you still believe that that could be the case if you pulled out? Yes, yes. The reason why we stayed was in the first place our people and the people that depend of the business. Often I get asked, what is your main job or your main objective? For me, in the first place, it's take care of our people, the 90 ,000 plus, because we provide professional and personal development for them and their families. And then there's a lot of other businesses and people, farmers, that depends on us.

18:20So I consider that my first. And then there is the consumer. That's the second one. So leaving Russia would probably have left 3 ,000 of our people without the job and probably 10 ,000 farmers. I know it's heavily discussed and it's not an easy decision. But over time, I've learned a lot from developing markets and conflicts. I think over time you try to stay, you try to be neutral in the whole conflict. We're not trying to take any side. We do the right thing in Ukraine. I think we did the right thing for our people in Russia. Can we be criticized for that? Yeah, of course. We pay taxes in Russia.

19:08That helps the war. I'm not pleased about that. but I also believe that if we would have seeded they would have confiscated our plants it would have probably given them a much bigger source of income keep on selling our products to fund the war so I feel that in the end it's not the most popular decision but I think it was the right decision the way I think about it is I need to do in the first place what's best for our people and for the business I am not a big fan of CEOs taking big political stances that's not me that's more who I personally am and yes it is a moral choice and if it was just me maybe the decision would have been different but if I took the angle I just explained I thought it was the right thing to do At the time you told the Financial Times that investors don't morally care whether companies stay in Russia do you regret that comment?

20:05Yes, yes It was also a little bit out of context. The discussion was, aren't investors all over you because you stay in Russia? And I said, no, they asked me about it, and I explained our position. I don't remember to be exact if I said don't morally care or didn't. I said, it doesn't seem that they are just focused on that. they're investors and they try to understand the company position. That was really what I was trying to say. But yeah, I mean, it wasn't reflected the way I would have hoped it would be. It's an interesting one, though, even if you said it, you didn't say it. I mean, that comment could be true because corporate social responsibility maybe 15 years ago, 10, 15 years ago was such a big topic, wasn't it?

20:57But perhaps it went too far in the sense that it was asking CEOs CEOs to choose between moral decisions and everything from the environment to making everybody happy. But the reality is with an organization that's for profit, can you really make everybody happy? No, you can't. And that's why I said you have to have filters. You have to be clear on what's your first level of responsibility. My first level of responsibilities are people. So So that always will shine through in the discussion or in the decision. Secondly, there's the consumers, and we try to provide the consumers. There's others.

21:36There's the communities we're part of. There's our investors, of course. So you have to go through all these layers, what makes sense. But you can't make them all happy, that's for sure. And it is important, I think, in advance, no matter what happens, to be clear on how you're going to make, to have that framework on how you're going to make your decisions. That's what I try to do. It's tough these days because with all these conflicts that are going on, governments more and more are trying to use companies. I mean, imagine China. The U.S. and China relationship has improved, but at a certain stage there have been U.S.

22:14companies who have been forbidden to do business in China. So it's tough sometimes to be sort of being... You're caught in the middle. Yeah, you're caught in the middle. And how do you deal with that? It's probably the most difficult aspect of the job and the part that I like the least. I just want to make good chocolate and make consumers happy. But it's not always like that. Well, let's talk about another supply chain disruptor, I guess environment and climate change. El Nino is very much in the news at the moment. Meteorologists are warning about the impact on cocoa production. Wells Fargo is warning that tight inventories and the risk of El Nino could keep cocoa prices elevated.

22:57Is that your view too? Is that what you're seeing? How does that filter into the business? Yes, for sure. If you think about cocoa, which is the main ingredient for chocolate, the cocoa supply chain in the last two, three years has been shaken in a way that has not happened for the last 30, 40 years. Probably never. And so there's something going on. I don't know if you want to go into all the factors, but roughly it is most of the cocoa in the world comes from Ghana and Ivory Coast. Ghana and Ivory Coast, the supply chain there is hundreds of thousands small farmers growing cocoa scattered around the country, a lot of them in the rainforest, sometimes cutting down the forest to do so.

23:45And the plants there have an endemic disease. So every year the cocoa harvest is less and less. So then suddenly there's a big weather event two years in a row. One year too wet, the other year too dry, and suddenly instead of going down 1 % or 2 % the harvest, it went down 18 % that year. So suddenly there's a shortage of cocoa, people start speculating, and cocoa prices go through the roof. Things have normalized now. The last two crops have been quite good, but it was with the last El Nino that this event happened. And so everybody's now saying, well, El Nino is back. Are we going to have another situation like that?

24:28What I know at this stage is there is a surplus of cocoa based on those very good crops of the last two years. The amount for chocolate, because this skyrocketed the prices for chocolate around the world, the demand for chocolate has come down. So you've got more supply, less demand, cocoa prices are normalized. Even if we have a not so great crop, which comes in the second half of this year, I think this year we should be fine. But certainly over the longer period, something needs to be done about the cocoa supply chain. And that's probably Ghana and Ivory Coast need to work on professionalizing the sector, getting rid of the endemic disease.

25:09And the rest of the world should also produce cocoa so that it all gets more balanced. We do that as a company. We are already balancing. But it's clearly a supply chain that needs intervention and that will require a coordinated effect or impact from companies and governments and farmers to make that happen. So the supply isn't necessarily a big issue for you this year. So what does that mean for consumer prices? Are they going to remain steady? Well, the cocoa prices not come back to where it was. We don't need to increase more, but cocoa prices would need to come down more for us to be able to follow that.

25:48that that's really the movement that we're waiting for. This doesn't help the whole discussion around El Nino. I think some people said cocoa prices will go up again. That causes a lot of anxiety. So we'll have to see what happens. But hopefully things will continue to come down. Do you think climate change is the biggest risk for your company at the moment, particularly in 5, 10, 15 years? I mean, it is something that we have to work on for sure. and we've got a net zero plan. I don't know if the listeners are familiar with it, but you have sort of the three levels. The third level, which is the biggest for us of our CO2 footprint, is their suppliers.

26:33So it's the cocoa supply chain, the wheat supply chain, the dairy supply chain, what goes on there. And so it is not the biggest risk, but it's the biggest dilemma. How do we influence that so that the carbon dioxide footprint goes down? And like cows, how do we reduce the CO2 outputs of cows or the methane outputs of cows? How do we bring down deforestation? We're almost at zero deforestation now in the cocoa supply chain. So that is working. But how do we make sure that the CO2 footprint of cocoa comes down and so on and so on? That, for me, is a big challenge because we've taken a commitment that we will have no more footprint or no more negative footprint by 2050.