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'm pleased to share that we delivered strong top line growth with positive volume mix. Developed markets grew mid-single-digits, led by solid progress in North America biscuits as well as recovery in Europe following successful implementation of our annual pricing. Emerging markets also grew mid-single-digits, despite continued boycotts of Western brands in certain markets. Strong profit dollar growth enabled us to continue our track record of robust free cash flow generating $2.5 billion year-to-date.
We expanded our presence in the fast growing cakes and pastries category by acquiring a majority stake in Evirth, a leading player in cakes and pastries in China. And I'll provide some additional color on this exciting partnership in a few minutes. We remain diligent in driving progress against our long-term growth strategy, focused on our core categories of chocolate, biscuits and baked snacks. These core categories continue to show strong consumption, and on top, consumers remain very favorable to our iconic portfolio, as such generating significant headroom opportunities. These strong fundamentals, combined with our advantaged geographic footprint, keep on giving us confidence that we are well positioned to compound long-term sustainable growth.
Turning to slide five, you can see that organic net revenue grew 5.4% this quarter, with adjusted gross profit dollar growth of 11.2%, enabling us to continue investing in the business. A&C spending is up mid-single-digits, helping to drive continuing consumer and customer loyalty to both our iconic global brands and our local jewels. And adjusted EPS grew 28.6% this quarter, and we have generated $2.5 billion in free cash flow through the first nine months of the year. On slide six, we are pleased to see that developed markets are beginning to recover with solid revenue growth and an increasing healthy volume mix in the third quarter. Unlike many of our peers, we are seeing continued consumer uptake of our core snacking categories. In North America, we are seeing volume growth start to rebound as inflation cools and we continue to expand distribution in areas like club.
Similarly, in Europe, revenue grew 8.1% in the third quarter, following significant disruption earlier in the year, as our annual pricing took hold. Unlike many of our peers, both volume mix and net revenue are beginning to turn the corner. Consumers are continuing to embrace chocolate and biscuits as everyday indulgences, And our revenue growth management strategies enable us to meet every consumer's needs, with a broad array of product formats, pack sizes and price points to meet their definition of value. Turning to slide seven, you can see a bit more context on how and why our snacking categories remain durable. In North America, consumer confidence remains stable, despite continuing concern with overall grocery prices. Biscuit category volume is improving to flat to slightly up over the last three months.
In the United States, private label volume share is declining, demonstrating that consumers remain loyal to their favorite brands and that our price pack architecture is working. As a result, our two largest US brands, Oreo and Ritz, are gaining share year-to-date. Meanwhile, in Europe, elasticities are moving slightly higher, but remain modest. We continue to see solid category value growth in both biscuits and chocolate, with private label share declining over the past three months. Some consumers are shifting to smaller packs of chocolate for everyday snacking, and again, our RGM and price pack architecture enable us to offer an appropriate range of choices. As we head into the year-end festive season, seasonals are also looking solid. In emerging markets, modest elasticities continue. Consumer confidence is stable in India, Brazil and Mexico. While the overall China economy remains challenged, we're seeing optimism beginning to return as stimulus policies take effect.
Overall, our combined emerging markets value and volume share is improving in both biscuits and chocolates. Turning to slide eight, it's important to reinforce that while the external environment remains volatile, we remain focused on accelerating our long term growth strategy. We're continuing to reinvest in our brands, expand distribution, drive M&A and scale sustainable snacking. We remain on track to deliver 90% of revenue through our core categories of chocolate, biscuit and baked snacks by 2030. And our teams continue to deliver strong progress against our strategic agenda. For example, our Oreo brand launched in August an innovative collaboration with Coca-Cola, our largest global brand activation to date. These two iconic brands joined forces in a 360 degree marketing campaign, encompassing digital, social, celebrity and in-person activation to unite our strong fan bases and build buzz around two high profile limited editions, a Coke flavored Oreo cookie and an Oreo flavored Zero Sugar Coke.
These types of investments not only enable us to stay top of mind for consumers, but also to strengthen partnerships with key retailers. Along with these marketing activations, we are continuing to strengthen store availability, visibility and execution around the world. For example, in Brazil, the convenience channel is growing high single-digit on a year-to-date basis, with plans to further grow coverage in this channel with additional stores. We are also continuing to harness the power of acquisition to capture synergies and drive growth. For example, in China, our acquisition of Evirth step changes our growth in the cakes and pastries category. I'll provide additional color in just a minute. Importantly, we remain committed to driving progress towards a more sustainable snacking business through our continued focus on our environmental and social sustainability agenda. For example, we recently introduced new recyclable paper packaging for our legendary LU biscuit brand in France, Belgium and the United Kingdom.
Now let's dig a little deeper into the cakes and pastries category and our recent announcement in China. As you can see on slide nine, the global packaged cakes and pastries category is valued at about $95 billion. Mondelez currently holds the number three global share position. And because this category is highly fragmented around the world, we see significant opportunities for bolt-on M&A as well as organic growth. We already have delivered strong growth in this category through our 2020 acquisition of Give & Go, the leading manufacturer of frozen to fresh brownies, cookies, cupcakes and related bakery products in North America. And our 2022 acquisition of Chipita, a leader in croissants, baked rolls and related snacks, anchored in Central and Eastern Europe.
In China, as you can see on the right hand side of the slide, the packaged cakes and pastries category is valued at about $14 billion. Within that category, the frozen-to-chilled segment is growing double digits, currently estimated at $1.5 billion. Chinese consumers increasingly seek fresh premium options with innovative and sophisticated taste profiles to meet a growing range of snacking occasions. On slide 10, you can see that's why we are excited about the expansion of our existing partnership with Evirth, the Chinese leader in the fast growing frozen-to-chilled baked snacks category. We have worked with Evirth for several years to develop, manufacture, market and sell cakes Several years to develop, manufacture, market and sell cakes and pastries, featuring some of our iconic brands, including Oreo and Philadelphia. Our recent purchase of a majority stake will enable us to further accelerate growth through continuous innovation, leveraging the combination of our high value brand with Evirth's advanced R&D and technical expertise.
Chinese consumers increasingly are seeking fresh premium products, with demand growing especially fast among younger generations in mid-tier cities. Evirth has a strong presence among key customers, including club stores, and our expanded partnership will enable us to scale distribution broader and faster. Before I turn the microphone over to Luca, I'd like to share some preliminary perspective on our approach to 2025, in light of the widely known cocoa cost headwind. Chocolate remains a great category and continues to generate significant consumer interest. Consumers count on our iconic brands, including Cadbury Dairy Milk, Milka, Toblerone, Cote D'or, Marabou, Freia, Lacta to celebrate special occasions, to share with family and friends and to unwind with the moment of mindful indulgence. As we will continue to invest in our brands, we remain confident that consumer loyalty will not only endure, but continue to grow, even as we execute the necessary short-term pricing steps.
Our primary focus is to continue to build the health and the growth of the chocolate category as a whole and our brands in particular. While we remain relentlessly obsessed with consumer value, we do anticipate some upticks in elasticity in certain markets, and we might need to adapt to more aggressive RGM and promotions. And while the temporary cost increase of Cocoa will put pressure on our margins, we will continue to invest in tools that strengthen brand loyalty and accelerate growth, such as visi coolers to improve visibility and accessibility, as well as continued strong investments in working media. We expect the majority of our portfolio to grow both top and bottom line, consistent with our algorithm, and we believe we are taking the right steps to position the chocolate business for attractive and long-term sustainable growth. We remain confident that we are well equipped to appropriately manage input cost headwinds and to emerge stronger.
With that, I'll turn it over to Luca to share additional insights on our financials.
