- Mondelez announced plans to get into the U.S. chocolate market by pairing its Oreo brand with iconic European chocolate brand Milka for a cross-category innovation in the mainstream segment, according to a company statement.
- The company will also significantly expand its sustainably-sourced Green & Black's premium chocolate brand with 70% dark chocolate in tablets, as well as sharing and gift packs.
- The Oreo-Milka collaboration is already available in more than 20 countries, and the company said it has expanded with velocities that are more than double the category average.
Mondelez's growth plan includes "contemporizing the core portfolio through fearless marketing and well-being snacks, filling key consumer and geographic white spaces, and driving sales and channel ubiquity, especially through e-commerce," the company said in a news release. These sentiments echo those the company outlined in its growth strategy last year.
The company's plans for expansion into the U.S. chocolate market show an initiative to move forward from the opportunity it lost when Hershey turned down Mondelez's takeover bid earlier this year. Hershey would have delivered the strong U.S. chocolate market presence Mondelez is after. But it didn't take long after Mondelez announced it was abandoning its pursuit of Hershey for the company to announce chocolate growth initiatives in China and now the U.S.
Not long after Hershey rejected the takeover offer, Credit Suisse released a report detailing "a new sense of urgency at the Hershey Co. to boost shareholder value and improve fundamental performance." What experts didn't seem to realize was that sense of urgency seems more apparent at Mondelez, which has been under pressure from investors to maximize revenue and profits or consider selling itself to a competitor.
The Oreo-Milka partnership demonstrates a benefit that other manufacturers may try to pursue: innovation through cross-category and cross-brand integration. By slimming down to focus on related categories like confections and snacks, Mondelez's portfolio is ripe with these partnership opportunities, including pairing different indulgences or sweet and savory snacks. This particular partnership also enables Mondelez to bring a typically European brand to the U.S. to add an international flavor and appeal to one of its most popular U.S. brands, Oreo.
Mondelez has continued to struggle with top-line growth, per recent earnings reports. But its latest moves to expand its dominance in the chocolate category could be enough to dampen investors' concerns and deliver shareholder value.