When Dirk Van de Put took over as CEO of Mondelez International in November 2017, the seasoned food executive inherited an enviable portfolio of iconic brands such as Oreo, Ritz and Triscuit poised to thrive from the burgeoning demand by consumers to snack.
But in the three years since, the CPG giant has stayed anything but complacent, investing in its global and local offerings, improving its supply chain and acquiring smaller brands to double-down on its dominant position in snacking. It's paid off, with the company increasing its market share and investors bidding up its stock price roughly 35% during that time.
"For me, the work never stops," Van de Put said. "You need to constantly question yourself, am I connecting with the consumer? Am I understanding what is going on? ... Are [shoppers] connecting to our brands? Are they consuming more? That by itself will constantly require us to question what we're doing.”
Soon after Van de Put took over, Mondelez focused more attention on accelerating sales growth after several years where the company, similar to others in the food space, prioritized reining in spending and expanding profit margins. Mondelez has committed to organic net revenue growth of at least 3% annually; last year it exceeded that figure at 4.1%.
In recent years, Mondelez has prioritized expanding the global reach of its nine biggest brands that include Ritz and Chips Ahoy, while also giving additional attention to many of its more than 60 local brands that had been neglected.
"For me, the work never stops. You need to constantly question yourself, am I connecting with the consumer? Am I understanding what is going on? ... Are [shoppers] connecting to our brands? Are they consuming more? That by itself will constantly require us to question what we’re doing.”
Dirk Van de Put
CEO, Mondelez International
With its global reach, the company has faced mixed results during the coronavirus pandemic as lockdowns and financial turmoil wreaked havoc on sales in some channels and markets around the world. Still, during its third quarter results released last month, sales showed signs of improving with global revenue up 4.9% to $6.67 billion. In North America, sales rose 6.3% from a year ago.
“I'm here to make this company the greatest snacking company in the world. How do we build great brands that play a significant role in the lives of consumers?" Van de Put said. "Having said that, when you're confronted with a situation like COVID, you have to make sure you get through that the right way because if you don’t, then there might not be a long-term strategy."
To keep the company top-of-mind with consumers during the pandemic, Mondelez worked closely with retailers both online and in traditional brick-and-mortar stores to simplify its portfolio to prioritize offerings such as bigger pack formats or brands that are popular with consumers. Mondelez's marketing team also increased its online brand presence by spending more time reaching out to consumers and their families at home through recipes and donation efforts.
Mondelez's snack-focused portfolio and roster of recognizable brands led to "unprecedented demand" for its snack offerings online as more consumers turned to e-commerce as a way to stock up and refill their pantries with brands they trust. To be sure, e-commerce is responsible for a small portion of sales — in the mid-single digits, according to analyst estimates — but it has become a big part of its long-term growth strategy.
"It's been a growing piece [of our sales]; clearly we're seeing a distortion in this environment," Glen Walter, executive vice president of Mondelez and president of North America, said in April. "We're anticipating that a good portion of that will stick."
In recent years, Mondelez has made its own deals to bulk up its snacking presence by purchasing brands such as premium cookie maker Tate's Bake Shop for about $500 million in 2018, and acquiring a majority stake in Perfect Snacks, the manufacturer of organic, non-GMO, nut butter-based protein bars and bites, last year. Earlier this year, it added a majority interest in Give & Go, a North American leader in fully-finished sweet baked goods.
Smaller deals "allow us to remain what we want to be, which is a great snacking company," Van dePut said.
Mondelez's effort to capitalize on changing consumer trends such as healthier offerings and emerging growth opportunities in snacking, has extended into SnackFutures, its innovation and venture arm. Mondelez has already tested out a handful of new snacklines by partnering with brands such as NoCOe, a sustainable aperitif cracker, and Dirt Kitchen Snacks, which are made from non-standard vegetables.
Van de Put has said Mondelez has an inherent advantage over its competitors because many of its brands like Oreo and Cadbury have been around for more than a century, deeply entrenching themselves into the regular consumption habits of shoppers. Mondelez also is innovating in its core product lines to give consumers a compelling reason to still want the product, but do so in moderation, such as through thinner Oreos, smaller package sizes or less sugar.
While on the surface it may seem the company is encouraging shoppers to eat less of its cookies, chocolates, biscuits and bars, Van de Put said this message is ultimately better for its brands because it helps foster a closer relationship with consumers — a connection that's particularly important among parents who could pass on their enjoyment of Mondelez products to their children.
"It's not that easy to walk in and say, 'Here's the new snacking brand that's going to beat an Oreo.' That's going to be very tough," Van de Put told Food Dive earlier this year. "These brands, ... people have eaten them for their whole lives — that creates a special link. And so it is difficult to sort of displace that."