Mondelez International Inc (MDLZ): This Sweet Business Is Poised for More Growth

Emerging markets

Competition is expected to pick up in the near term in the emerging markets. Mondelez International Inc (NASDAQ:MDLZ) is boosting its investment in emerging markets to keep up with the intensified competition. Management will spend about $10 million in 2013, $200 million in 2014, and up to $300 million in 2015 and beyond to drive the top-line growth in the emerging markets.

The Hershey Company (NYSE:HSY) is also expanding into emerging markets. Hershey plans to expand international sales to 25% of global sales by 2017, up from its current 10%. While sales of chocolate, candies and gum in China increased 46% from 2007 to 2012, Hershey is just catching up, with a limited 2.2% market share last year. Hershey also unveiled a candy known as Yo-man in China. Hershey plans to spend heavily into marketing to gain market share in China for its new condensed-milk candy. Premium milk candy is the fastest-growing segment in China.

According to another article written and published by Motley Fool, Nestle and Hershey are in acquisition talks. Nestle wants to acquire Hershey, which has strong brand recognition in North America and has been growing in China. Nestle had previously acquired Hsu Fu Chi in China and continues to expand aggressively in the country. Due to the rising demand for consumer goods in Asia, Nestle opened two research facilities in China in October and its first R&D center in India in November 2012. In May 2013, Nestle also expanded its R&D operations in Singapore. Nestle, with a diversified product portfolio and an expansive global distribution platform, is shifting its focus toward Asia and emerging markets.

Bottom line

Mondelez International Inc (NASDAQ:MDLZ) offers investors a unique investment vehicle to tap into diversified markets, ranging from chocolate and gum to biscuits. By working on its supply chain and boosting its investment in emerging markets, Mondelez’s bottom-line and top-line growth targets are realistic. Mondelez will be a solid long-term holding with its strong, diversified brand portfolio, and steady growth.

Nick Chiu has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article This Sweet Business Is Poised for More Growth originally appeared on Fool.com.

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