Dive Brief:
- Mondelez will invest $65 million in building a global network of Research, Development & Quality (RDQ) "hubs," according to a news release.
- To serve the company's growth and innovation needs, Mondelez will redesign its network of both new and existing facilities. All of them will be operational by late 2018.
- Mondelez also hopes to "recruit, retain and develop" talent while solidifying a "stronger presence" in developed and emerging markets, the company said in a statement.
Dive Insight:
The food and beverage industry saw a flurry of R&D facility activity last year, particularly the construction or renovation of new R&D plants. It's no surprise that manufacturers are investing more in R&D, especially as top-line growth sags and cost-cutting initiatives bring in additional investing opportunities.
Mondelez has released a stream of major company announcements involving the expansion or evolution of the company's portfolio and operations. Last month, Mondelez said it was abandoning its bid for Hershey due primarily to recent shareholder changes. That made experts question how Mondelez would break into the U.S. chocolate market.
Last week, the company answered those questions by detailing an expansion plan for chocolate in the U.S. It includes pairing its Oreo brand with iconic European chocolate brand Milka and expanding its sustainably-sourced Green & Black's premium chocolate brand. These cross-category brand partnerships and brand expansions will require a significant R&D investment, and these new hubs will likely be at the center of the action.
In July, Mondelez also announced that it would boost its presence in the Chinese market, particularly its Milka chocolate brand and e-commerce efforts. China is a key market for Mondelez, whose sales fell in all regional markets but North America last quarter, per the company's latest earnings release.
Mondelez has the opportunity to build on the e-commerce network it already established in the area with Alibaba and the company's store on Tmall.com. But Mondelez will have a better vantage point with its Suzhou, China, RDQ facility slated to open in the next few years.