Mondelez, renowned for producing Oreo cookies, has implemented a new organizational framework within its Russian sector, marking a significant shift in its European business structure.
Revealed through internal documents obtained by Reuters, the initiative emerges amidst investor and activist demands for the company to exit Russia following extensive boycotts. Despite halting its advertising efforts in Russia, Mondelez continues its operations.
A communication from Vince Gruber, Mondelez Europe’s president, detailed the nomination of a new general manager for the Russian operation, which now functions as an independent entity. This adjustment places the Russian General Manager under the supervision of a senior executive, who, in turn, reports to Gruber. Critics remain unconvinced by Mondelez’s strategy to maintain its Russian presence, operating three factories and continuing to sell products such as Milka chocolate despite pressures to withdraw.
Mondelez responded to queries, indicating that by the close of 2023, it had restructured its Russian business for greater independence, focusing on local production and distribution. This change eliminates the need to import from and export to Europe.
The company is slated to present at the forthcoming Consumer Analyst Group of New York conference in Boca Raton, Florida. Following the 2022 invasion of Ukraine by Russia, numerous international brands, including McDonald’s and Starbucks, have withdrawn from Russia, facing considerable financial write-offs. Yet, Mondelez, alongside peers like Nestle’s Maggi, remains active in Russia, a country not subject to food-related international sanctions.
In its February annual report, Mondelez recognized the conflict in Ukraine as a potential risk to its operations, which could result in property damage and attract scrutiny from stakeholders over its activities in Russia. The firm justifies its continued Russian operations by highlighting its role in supplying essential food products, suggesting that ceasing operations would negatively impact food availability for those not involved in the conflict.
Gruber disclosed a restructure of Mondelez Europe into 14 “commercial units” on January 31, aiming for more localized management. Alexey Blinov, a finance executive from Moscow, was appointed Russia’s new General Manager on February 13. Despite retailer disagreements over price increases, Europe remains Mondelez’s largest sales market.
In the aftermath of Russia’s invasion, Mondelez scaled back its Russian operations, focusing on essential goods, yet faced ongoing internal and external pressures for a total withdrawal. The company experienced a boycott in Nordic countries following its designation as an “international sponsor of war” by a Ukrainian agency. Though details were sparse, Mondelez pledged to render its Russian business self-reliant in its supply chain by the end of the year.
The company’s recent annual report reveals increased profitability within its Russian business. Before the conflict, Mondelez’s Moscow-based executives also managed Ukrainian operations, separated from Moscow’s oversight after the invasion.
