Cocoa prices plunge, Mondelez up

Mondelēz International reported first-quarter 2026 revenue of $10.08 billion on April 28, up 8.2% from a year earlier, as the Oreo and Cadbury maker said cocoa costs had begun to improve after the commodity’s retreat from 2024 highs. The company reaffirmed its full-year outlook despite what it called significant economic volatility. Cocoa futures have fallen this year as supply expectations improved, giving packaged-food companies a different cost backdrop than the one that drove repeated price increases across chocolate aisles last year. The move matters because Mondelēz sits near the center of the branded-snacks tradeoff now facing consumer companies: whether to keep more of the raw-material relief in margins or use it to support pricing, promotion and volume. In the first quarter, the company’s organic net revenue growth was 3.0%, with pricing contributing 3.5 percentage points and volume/mix down 0.5 points. ### How much did cocoa prices actually fall? ICE cocoa futures have retreated from the record levels reached in 2024, and exchange data show the contract remains the global benchmark for physical cocoa pricing. Barchart said in late February that New York cocoa had fallen to a contract low for the nearby May 2026 contract and that London cocoa hit a roughly 2.75-year low, citing stronger supplies and weaker demand expectations. Supply forecasts have been a major driver. Barchart reported that StoneX on January 29 projected a global cocoa surplus of 287,000 metric tons in the 2025/26 season and a 267,000-ton surplus in 2026/27. The same report cited International Cocoa Organization data showing global cocoa stocks rose 4.2% year over year to 1.1 million metric tons as of January 23. ### What did Mondelēz say about the cost backdrop? Mondelēz said on April 28 that its “fundamentals” remained strong and that it would keep investing behind long-term growth opportunities. The company’s prepared materials and call commentary pointed to a more favorable cocoa setup than the one embedded in prior periods. A company earnings-call summary published by Yahoo Finance said management’s cocoa market assumptions were based on a fair value of about 2,500, with executives monitoring the second-half crop and industry coverage levels above 10 months. That comment matters because it showed management anchoring planning assumptions well below the peaks that hit earnings expectations across the sector in 2024. ### What did the first-quarter numbers show beyond revenue? First-quarter gross profit at Mondelēz rose 15.3% to $2.80 billion on a reported basis, while reported gross margin increased 1.7 percentage points to 27.8%, according to the earnings release. Adjusted gross profit was $3.09 billion, down 0.6%, and adjusted gross margin was 30.7%, down 2.7 percentage points. By geography, Europe generated $3.87 billion in revenue, up 9.0%, while North America posted $2.56 billion, up 0.5%. Asia, the Middle East and Africa contributed $2.30 billion, up 14.3%, and Latin America added $1.35 billion, up 12.1%. ### Does lower cocoa automatically mean higher profit? Mondelez did not say it would simply keep all of the benefit. The company said it would continue to invest behind growth, and its first-quarter mix of pricing and volume showed that demand support remains part of the operating equation. That leaves the next quarters as the clearest test. If cocoa stays closer to current assumptions, investors will be watching whether promotional activity increases, whether price growth slows further, and whether volume/mix improves from the first quarter’s 0.5-point decline. ### Where will investors look next? April 28 marked Mondelēz’s latest formal update, and the company reaffirmed its fiscal 2026 outlook in that release. Its investor relations site lists quarterly materials, prepared remarks and webcast archives that investors will use to track any further change in cocoa assumptions. The next milestone is the company’s second-quarter 2026 earnings report, which Mondelēz will post on its investor relations page later this summer, alongside updated guidance, regional sales figures and management commentary on commodity costs.