Mondelēz Relies on Unique Recipe for Future of Snacks
By Dale Buss
Nearly every major CPG company lately has embarked on a way to access innovation and entrepreneurial energy in cutting-edge ideas and smaller companies. Mondelēz International has now laid out its gambit: an “innovation hub” called SnackFutures that will capitalize on changing consumer trends and emerging growth opportunities in snacking around the world.
Digital snack platforms and capabilities are one of the three high-growth areas that will be the focus of SnackFutures, including exploring snacks online, and order and delivery of Mondelēz products. The other two main targets will be “well-being” snacks and ingredients such as innovations with fruits and vegetables, and gut health; and premium snacks and ingredients such as those tailored to demographics or diet, including seniors and vegans.
Mondelēz – parent of iconic snack brands including Oreo, Ritz, BelVita, Cadbury, Toblerone and Sour Patch – isn’t trifling in this effort. The Deerfield, Ill.-based company is targeting SnackFutures to contribute a robust $100 million to revenue growth by 2022, which is no small amount even for a $30-billion empire.
What’s more, Mondelēz is spreading its bets as broadly as possible by using SnackFutures to harness both internal and external resources to reinvent and invent products, brands and entire businesses in key strategic areas, and those with untapped potential, including venturing with early-stage entrepreneurs. Many other CPGs have initially kept their dealings with startups more segregated, such as in incubator and accelerator programs.
“The structure is indeed unusual, and that was intentional,” Brigette Wolf, head of SnackFutures Innovation, told CPGmatters. “SnackFutures is dedicated to unlocking snacking growth opportunities and is unique in several ways. We believe the best way to serve consumers in the future is by connecting world-class internal experts and talent with cutting-edge external partners to create exciting, forward-thinking solutions.”
Wolf said that Mondelēz was “mindful in how we wanted to set up SnackFutures’ approach to innovation. We are building relationships across our ecosystem of partners and entrepreneurs to be collaborative, flexible, experimental and grounded in curiosity and passion for consumers. It is not a one-size-fits-all.
“SnackFutures utilizes existing innovation approaches and gives us more dedicated resources to really accelerate our innovation activity. We’re learning and adjusting our approach based on what we see, and we think we’ve both a unique proposition here with inventing, reinventing and venturing under one roof.”
What’s more, Wolf explained, SnackFutures’ team reports to Tim Cofer, Mondelēz’s chief growth officer, who oversees consumer-centric global functions including strategy, insights and analytics; marketing; e-commerce; research and development; and innovation. “This means we will be able to fast-track development and iterations of certain products or steps in the R&D process as well as have a suite of capabilities on hand,” Wolf said.
Digital platforms are one of the most significant arenas where SnackFutures will operate, and that’s true across the company’s operations. Among other things, Mondelēz wants to be able to take better advantage of digital “impulse buy moments” as traffic in grocery-store checkouts and other retailers decrease with the rise of online shopping.
On the consumer-facing side, for instance, SnackFutures is intended to help Mondelēz boost its use of new technologies such as “social listening” and achieve consumer-centric digital marketing. This will include elevating its use of advanced analytics so that the company can better understand consumer needs and react more quickly to emerging trends, Wolf said.
Also responding to a strong new trend in snacking, SnackFutures will help Mondelēz explore joining the “curated snack” business, in which a variety of digital startups have persuaded thousands of American consumers to subscribe to services that regularly send them snacks pre-selected for them by the service. SnackFutures will explore “curated-snack options that can be personalized including on digital platforms,” Wolf said.
SnackFutures also will help Mondelēz optimize its use of artificial intelligence, automation, 3D printing and other aspects of digitalization. This includes improving its supply-chain operations and “achieving excellence” in multiple retail channels. The overall goal is to “reduce our time to market, reduce our costs and personalize our products” through various digital initiatives, Wolf said.
Overall, Mondelēz is working toward bringing in $1 billion in e-commerce revenue annually, and the company is on track to meet that target. SnackFutures also will help advance Mondelēz toward another important goal: have a well-being focus for half of its products by 2020.
Already, Wolf noted, Mondelēz has delivered on several of its well-being-snacks targets in advance of its 2020 goal. By the end of 2016, the company had met the objective of getting 25 percent of its revenue from so-called Better Choice products, which meet an improved nutritional profile compared with other Mondelēz lines.
Mondelēz also has exceeded our goal in growing portion-control products, sales of which have expanded by 39 percent and now comprise about 10 percent of Mondelēz revenues. By 2020, Wolf said, Mondelēz plans to have 15 percent of its revenue from portion-control options.
And Mondelēz has improved the nutrition profile of its overall global portfolio, achieving its goal to increase whole grains by 25 percent, reduce saturated fat by 6 percent, and sodium by 5 percent, Wolf said.
“Building on those achievements, we are now focused on growing the well-being options within our current portfolio – like BelVita and Triscuit – as well as developing new offerings,” she said.
By optimizing the direction of its internal resources and forming relationships with innovation-based smaller companies, Wolf said, SnackFutures hopes to accelerate Mondelēz products aimed at satisfying consumers’ “desire for well-being snacks with authentic ingredients and clean labels, more premium indulgent snacks for special occasions,” as well as digitally curated snacks.