Mondelez 2012 Annual Report Download - page 13

Table of Contents
Maintaining, extending and expanding our reputation and brand image is essential to our business success.
We have many iconic brands with worldwide recognition. Our success depends on our ability to maintain brand image for our
existing products, extend our brands into new geographies and to new platforms and expand our brand image with new product
offerings.
We seek to maintain, extend and expand our brand image through marketing investments, including advertising and consumer
promotions, and product innovation. Continuing global focus on health and wellness, including weight management, and increasing
media attention to the role of food marketing could adversely affect our brand image or lead to stricter regulations and greater
scrutiny of food and snacking marketing practices. Increased legal or regulatory restrictions on our advertising, consumer
promotions and marketing, or our response to those restrictions, could limit our efforts to maintain, extend and expand our brands.
Moreover, adverse publicity about regulatory or legal action against us could damage our reputation and brand image, undermine
our customers’ confidence and reduce long-term demand for our products, even if the regulatory or legal action is unfounded or not
material to our operations.
In addition, our success in maintaining, extending and expanding our brand image depends on our ability to adapt to a rapidly
changing media environment, including our increasing reliance on social media and online dissemination of advertising campaigns.
We are subject to a variety of legal and regulatory restrictions on how and to whom we market our products, for instance marketing
to children. These restrictions may limit our ability to maintain, extend and expand our brand image as the media and
communications environment continues to evolve. Negative posts or comments about us on social networking web sites could
seriously damage our reputation and brand image. If we do not maintain, extend and expand our brand image, then our product
sales, financial condition and results of operations could be materially and adversely affected.
The consolidation of retail customers creates larger retailers with increased influence in the marketplace.
Retail customers, such as supermarkets, warehouse clubs and food distributors in the European Union, the United States and our
other major markets, continue to consolidate, resulting in fewer customers on which we can rely for business. Consolidation also
produces large, more sophisticated retail customers that can resist price increases and demand lower pricing, increased
promotional programs or specifically tailored products. In addition, larger retailers have the scale to develop supply chains that
permit them to operate with reduced inventories or to develop and market their own retailer brands. Further retail consolidation and
increasing retail power could materially and adversely affect our product sales, financial condition and results of operations.
Retail consolidation also increases the risk that adverse changes in our customers’ business operations or financial performance
will have a corresponding material adverse effect on us. For example, if our customers cannot access sufficient funds or financing,
then they may delay, decrease or cancel purchases of our products, or delay or fail to pay us for previous purchases.
Changes in our relationships with significant customers or suppliers could affect sales and our ability to supply products
to our customers.
During 2012, our five largest customers accounted for 15.6% of our net revenues. No single customer accounted for 10% or more
of our net revenues from continuing operations. There can be no assurance that all significant customers will continue to purchase
our products in the same mix or quantities or on the same terms as in the past, particularly as increasingly powerful retailers
continue to demand lower pricing and develop their own brands. The loss of a significant customer or a material reduction in sales,
or a change in the mix of products we sell to a significant customer could materially and adversely affect our product sales, financial
condition and results of operations.
Disputes with significant suppliers, including those related to pricing or performance, could adversely affect our ability to supply
products to our customers and could materially and adversely affect our product sales, financial condition and results of operations.
Commodity and other input prices are volatile and may rise significantly.
We purchase large quantities of commodities, including sugar and other sweeteners, coffee, cocoa, wheat, corn products, soybean
and vegetable oils and dairy. In addition, we use significant quantities of packaging materials to package our products. We also use
natural gas, fuels and electricity for our factories and warehouses. Prices for commodities, other supplies and energy are volatile
and can fluctuate due to conditions that are difficult to predict, including global
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