Food

Mondelez International resetting its innovation agenda | 2021-02-17

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CHICAGO — Executives at Mondelez International, Inc. accelerated several strategic initiatives last year to position the company to emerge stronger from the pandemic, said Dirk Van de Put, chairman and chief executive officer. Efforts included reducing expenses, simplifying operations and investing in brands and capabilities.

“Our actions leading up to the crisis and throughout 2020, position us to sustain 3% plus revenue growth in 2021 and beyond,” Mr. Van de Put said during a Feb. 16 presentation at the Consumer Analyst Group of New York virtual conference.

The company’s strategies have led to improvement in market share. In 2020, Mondelez achieved record share gains as a company, notably in key markets including chocolate in the United Kingdom and cookies in the United States and China.

“We’ve increased our focus on core brand renovation,” Mr. Van de Put said. “We are working with more agility and getting to market quicker. And we’re leveraging our SnackFutures hub to nurture on trend emerging brands.”

Mondelez is focused on launching fewer, more impactful and more incremental new products. Management plans to eliminate a quarter of stock-keeping units to prioritize the highest-value, most disruptive innovation, said Luca Zaramella, chief financial officer.

“We also plan to better utilize revenue growth management in terms of mix, price-pack architecture, promotions and smart pricing to grow both top and bottom lines,” Mr. Zaramella said.

The company’s portfolio aligns with consumer trends and continued momentum in snacking, which proved “exceptionally resilient” during the pandemic, Mr. Van de Put noted, citing Mondelez’s annual State of Snacking survey.

“While COVID changed consumer behavior in many ways, it did not reduce the desire to snack,” he said. “Nearly half of people we surveyed snacked more during COVID as they sought ways to take a break, get a boost or a reward during tough times. And nearly 70% of our consumers said they favored trusted brands during COVID, which has been positive for our portfolio.”

The Oreo cookie brand, a $3.6 billion global business, registered double-digit growth in 2019 and 2020, “with a clear path to add $1 billion over the next several years,” Mr. Van de Put said.

“Oreo still has huge headroom to grow,” he said. “We are leaders in the US and China, but in other markets, we’re under-indexed with significant opportunities. We have identified 10 focus markets and defined clear strategies for the brand in each market based on maturity. A share gain of just 1.2 points globally would make Oreo into a $4.5 billion global brand by the end of 2023, and we are focused on achieving that target.”

Another area of focus is e-commerce. Mondelez has invested in improving its digital content and advancing its capabilities, including configuring its supply chain to enable direct-to-consumer shipping. As a result of these efforts, the company’s e-commerce revenue grew 75% last year and now represents 5% of total revenue, up from 3% in 2019.

Expanding in high-growth segments such as well-being, premium and affordability represents another opportunity. In recent months, Mondelez has introduced reduced-sugar and portion-controlled options, as well as gluten-free Oreo cookies and products Mr. Van de Put described as “more natural and authentic.”

“And we are accelerating our presence in well-being segments through fast-growing strategic acquisitions most recently with Hu and before that, Perfect Snacks,” he added.

Recent acquisitions also help Mondelez gain traction in additional snacking categories, such as packaged cakes and pastries, a $65 billion global market, Mr. Van de Put said.

“We see opportunities to gain significant share both through brand extensions and through acquisitions,” he said. “Our recent acquisition of the North American in-store bakery specialist, Give & Go is a clear milestone, and we see more opportunities for growth.”

Snack bars also is an area of interest.

“We’ve already made an important move by buying Perfect Snacks, the No. 1 player in chilled bars in North America. And our biscuit brands like belVita and chocolate brands like Cadbury each have plans to grow in snack bars in Europe and Asia with new offerings to meet functional and better-for-you needs.”

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