Mondelēz International Tightens Grip on Snack Categories
By Jack Grant
Around 75 percent of consumers around the world are snacking daily, according to Dirk Van de Put, CEO of Mondelēz International. In fact, younger people often replace traditional meals with snacks.
All of that is good news for Mondelēz which sells products in four snack categories – chocolate, biscuit, gum and candy – and controls 45 percent of the market.
“We are the leading packaged snacks company in the world,” Van de Put said in a presentation recently at the Consumer Analyst Group of New York (CAGNY) conference in Boca Raton, Fla.
“The growth that we are seeing in our categories is accelerating,” he said. “Biscuits, chocolate, gum and candy grew 2.8 percent in 2018, and we are confident that this growth will continue given the underlying changes in consumer behavior.”
He singled out Cadbury as “the world's best-selling chocolate brand” with almost $4 billion in net revenue. To drive growth, “we are using a deeper understanding of our consumers to find areas to drive incremental growth. In UK, the birthplace of Cadbury where the brand is over 100 years old, we grew organic net revenue by a mid-single digit in 2018.”
He announced that Mondelēz is launching a 30-percent reduced sugar version of Cadbury dairy milk. The repurchase of the Cadbury biscuit license has led to developing snacks like chocolate-coated biscuits and soft cakes.
“We’ve been able to apply these strategies to markets like India, which is Cadbury’s biggest market,” he said.
Van de Put called Oreo “the world’s favorite cookie,” adding that “we’ve been able to grow the brand organic net revenue by high single digits in 2018, with strength across all our markets.”
The second biggest Oreo market is China, he said, where the brand stopped growing in sales two years ago. “By listening to our consumers, we launched a holistic brands innovation and applied a new marketing playbook to rejuvenate the brand. This included new communication and augmented reality packaging.
“Our innovation adapted the product to the Chinese palate and upgraded the packaging,” he continued. “And to drive penetration, we launched tailored packs for e-commerce and convenience stores.”
The results have been noteworthy. Mondelēz grew Oreo sales double-digits in China in 2018 and increased its market share. The Oreo e-commerce business alone grew more than 50 percent and increased market share by 3 points.
“This localized Oreo approach is working well around the world,” he reported. “Indonesia, France, and Central America are other great example of the Oreo success around the world.”
Van de Put listed five structural advantages that enables Mondelēz to succeed in snacking around the world:
- Leadership positions in high growth categories
- Powerful global and local brands
- A global footprint with scale across geographies
- A committed group of talented people.
The company’s strategic plan aims to drive accelerated top-line growth by adopting a new, more consumer-centric commercial approach designed to increase demand for Mondelēz International products, deliver operational excellence across the value chain, and build a winning growth culture in which local commercial teams are aligned in mission, approach and incentives.
“While snacking as a behavior is growing, consumers feel a certain degree of attention as they do so,” Van de Put said. “On one hand, they want to snack because it fits in their lifestyle; on the other hand, they want to eat right. We do not see that tension as a limitation of the snacks market nor of our business.”
Editor’s Note: This story is based partially on a transcript provided by Seeking Alpha (www.seekingalpha.com).