Dirk Van de Put
Chairman and Chief Executive Officer at Mondelez International
Thanks, Shep, and thanks to everyone for joining the call today. I will start on Slide four. I am pleased to share that we delivered another robust quarter with high quality top line growth continued strength in both developed and emerging markets and strong profit dollar growth. This execution, combined with continued acceleration of our strategic initiatives, supports raising our full year revenue growth and adjusted EPS outlook.
Reinvesting in our business is one of the best ways we can deploy capital. And I'm happy to say that we continue to increase investments in our brands and capabilities that should reinforce and build upon our strong foundation. We also continue to make great progress in reshaping our portfolio with the full integration of our Chipita business as well as the closing of our acquisitions of Clif Bar and Ricolino.
We remain confident that the strength of our brands and our proven strategy position us well to deliver attractive, sustainable growth for the remainder of 2022 and beyond. Above all, we remain extremely confident in our people who remain relentlessly focused on delivering the right snacks for the right moment made the right way to consumers around the world.
Turning to Slide five. You can see that our strategy is continuing to drive a virtuous cycle. We are well positioned to deliver a strong full year '22 performance and long-term revenue growth. This quarter, our revenue growth was 12.1%, which means 11.2% growth year-to-date. The revenue was generated through continued volume growth as well as strong pricing necessary because of ongoing cost inflation, and it demonstrates the resilient demand for our brands. That revenue growth is fueling our gross profit, which is growing 12.8% for the quarter and 10.8% year-to-date.
This very strong gross profit growth is allowing us to increase our A&C investments high single digit, which in turn will help us to continue to drive sustainable top line and repeating the virtuous cycle. The strong gross profit growth also generated, after investments, operating income growth of 9.6% for the quarter and 10.6% year-to-date while delivering great free cash flow results.
As you can see on Slide 6, we delivered 12.1% organic net revenue growth in Q3. Volume remained solid relative to much of the sectors as consumers continue to choose our trusted and beloved brands even as we implement necessary pricing.
We view our performance in the third quarter and year-to-date as further evidence that our long-term strategy continues to pay off. Since the launch of our new growth plan in 2018, we have consistently over-delivered on net revenue growth through a virtuous cycle of increasing investment, strong local execution and targeted incentives. We remain confident that this strategy will continue to deliver attractive growth in the quarters and years to come.
Like many companies, as shown on Slide 7, we continue to navigate through a dynamic operating environment, driven by cost inflation, the energy crisis in Europe and supply chain volatility. Let's take a closer look at each of these dynamics and the steps we are taking to address them. First, we continue to face elevated input cost inflation, especially in the areas of energy, transportation, packaging, wheat, dairy and edible oils. To offset these challenges, we have implemented appropriate price increases across key markets, including Europe.
Additionally, we have announced further pricing actions across numerous markets across the globe, including the United States, which takes effect in December '22, and we are preparing for '23 negotiations in other markets. We also continue to take appropriate action to hedge our commodity costs with greater flexibility while continuing to advance our ongoing productivity initiatives.
Second, in terms of energy inflation and continuity, we remain focused on risk management tools and alternative sources to help mitigate the impact. And third, we continue to manage through volatility in the supply chain, especially in the U.S. due to labor shortages at third party as well as a continuing shortage of trucking capacity and containers. We are prioritizing key SKUs to protect share and continue to make progress in improving manufacturing and warehouse capacity.
Turning to our categories and the consumer on Page 8. Our latest research shows that snacking continues to play a central role in consumers' lives. And as a result, our core categories of chocolate and biscuits remain resilient.
Consumers in developed markets continue to prioritize groceries over other forms of spending, and they continue to view our brands as affordable indulgences. Meanwhile, in emerging markets, consumer confidence remains strong with growing demand for our categories and continued loyalty to our iconic brands.
Because of this enduring brand loyalty, private label share is either flat or down in the vast majority of our markets. Shoppers continue to say they are much less likely to switch to private label in chocolate and biscuits compared to other categories.
With the return to school, we are seeing growth in products popular for school lunches like biscuit multipacks here in the U.S. We're also seeing continued growth in chocolate bars, treat sizes, gifting and seasonal shapes in Europe.
Looking forward to the Christmas season, the majority of European consumers say they plan to spend the same amount over the holidays, if not more, as in 2021. They also say they plan to spend more money at home and on gifting with less money spent on dining out and entertainment. These category dynamics combined with the enduring strength of our trusted and beloved brands give us confidence that we will continue to successfully navigate inflationary periods like today.
Moving to our efforts around portfolio reshaping on Slide nine. I'm pleased to share that we are continuing to advance our strategy of strengthening our leadership in core categories through our acquisition and divestment approach complemented by strong integration playbook.
Over the summer, we completed the integration of Chipita, a high-growth European leader in packaged croissants and baked snacks. Chipita provides us an important platform to further accelerate growth in the attractive biscuits and baked snacks category.
More recently, we closed our acquisition of Clif Bar & Company, expanding our global snack bar business to more than $1 billion, anchored by the marquee brand widely loved for taste and sustainability. This business is up low double digits on a year-to-date basis and we are excited to take this great brand to the next level.
And just today, we closed our acquisition of Ricolino, Mexico's leading confectionery company, doubling the size of our business and more than tripling our routes to market in the high-priority Mexican market.
These are just the latest steps in our ongoing commitment to accelerate focus on our core categories, filling geographical white spaces, expanding our presence in high-growth channels and growing our presence in key segments and price tiers. We're confident that this focus will allow us to drive sustained growth accretive to our algorithm across the portfolio.
As we continue to accelerate our focus on growth, we remain committed to doing our part to drive positive change at scale. At our investor update earlier this year, we announced that we have elevated sustainability to become the fourth pillar of our company's long-term growth strategy. Within this framework, you can see on Slide 10 that we recently launched the next chapter of Cocoa Life, our signature cocoa sourcing program.
Cocoa Life already has delivered strong results. Over the past decade, farmer net incomes have increased about 15% in Ghana and about 33% in Cote d'Ivoire. Children are better protected with more robust monitoring and remediation system, and we're helping to prevent deforestation by educating farmers about optimal farming practices. But cocoa farmers and their communities still face big systemic challenges. That's why we're investing another $600 million, bringing our total investments to $1 billion with an aim to source 100% of our cocoa volume through Cocoa Life farmers by 2030.
While we are excited about the promise of these investments, we continue to call for more collaborative efforts and collective actions to drive greater impact, including new private-public collaborations. We are proud of our leadership in helping to make cocoa right, and we'll keep you updated on our progress.
Finally, before I hand over to Luca for more details on our financials, I would like to make -- sorry, to take a moment to share some updates to our leadership team. First, I would like to congratulate Sandra MacQuillan, our Chief Supply Chain Officer, on her well-deserved retirement. Since joining Mondelez in 2019, Sandra has brought focus and clarity to our supply chain organization, with a people-first leadership style and an unrelenting commitment to doing it right from shelf to field. We thank her for her tremendous contributions.
Frank Cervi has assumed the role of Chief Supply Chain Operations Officer, reporting directly to me. Frank is a proven leader, bringing more than 30 years of global supply chain experience to the table. He has a strong drive for executional excellence, tackling big challenges and pursuing continuous improvement. His recent roles within Mondelez, including, most recently, leading supply chain strategy, position him well for continued success.
Additionally, after a successful 34-year career in research and development, Rob Hargrove, our Chief R&D Officer, will be retiring January 2023. During his tenure with Mondelez, Rob successfully transformed the R&D function from a complex blend of category and geographic activities to a well-connected, technically rigorous global community. We thank him for his many years of dedication and accomplishments.
With Rob's retirement, we welcome Daniel Ramos as our new Chief Research and Development Officer, reporting directly to me effective November 8. Daniel is a seasoned global executive with more than 25 years of R&D and consumer-centric innovation expertise. He joins us from The Estee Lauder Companies where he had a strong focus on advancing sustainable packaging initiatives.
One final piece of leadership news, Javier Polit, our Chief Digital and Information Officer, is now serving on our Mondelez leadership team, providing enhanced strategic oversight as we advance our commitment to becoming the digital snacks leaders. Since joining the company almost three years ago, Javier has elevated our technology initiatives and infrastructure at both the global and business unit levels. Javier will continue to report to Luca.
With that, I will hand over to Luca for more details on our financials.