Mondelez International is experiencing "unprecedented demand" for its Oreo, Ritz, Triscuit and other snack offerings online as more consumers turn to e-commerce as a way to stock up and refill their pantries during the coronavirus outbreak, a top executive told Food Dive.
Glen Walter, executive vice president of Mondelez and president of North America, said the spike in consumption through e-commerce is especially prominent in its core snack offerings as shoppers gravitate toward brands that "people know and trust and love."
"There's no question we've seen unprecedented demand," Walter said. "It is normalizing a bit but still, from everything we're seeing, staying at much higher levels."
While Mondelez's focus on snacks enabled it to tap into the broader push by consumers into snacking even before the current pandemic unfolded, the company is getting a boost from people spending much of their time at home — in many cases with children who are munching on crackers, cookies and other foods throughout the day.
Walter declined to offer specific numbers on e-commerce sales, citing the company's quiet period ahead of earnings later this month, except to say that all its brands are posting "growth far above their normal rates."
"There's no question we've seen unprecedented demand. It is normalizing a bit but still, from everything we're seeing, staying at much higher levels."
Glen Walter
Executive vice president of Mondelez and president of North America
To be sure, e-commerce is responsible for a small portion of sales — in the mid-single digits, according to analyst estimates — at Mondelez. In comparison, total revenue at the maker of Chips Ahoy, Cadbury and Nutter Butter totaled nearly $29 billion last year.
Mondelez has been honing its e-commerce presence in recent years as consumers purchase more foods and beverages directly from manufacturers, retailers and third-party pickup and delivery services such as Instacart or Peapod.
During the current outbreak, Walter said the company is working 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 right now with consumers.
Walter noted that Mondelez has improved its search capabilities so shoppers can find its products easier and worked with consumers to replicate the store experience in an e-commerce world when it comes to things like impulse buys and making sure consumers can easily find what they need.
Mondelez also has tweaked some packaging to make it unique for online channels. For example, last year it rolled out a Snapchat campaign that included special packaging with Snapcodes that let users access a cookie-themed augmented reality lens. The company has also enabled consumers to buy cookies like Oreo directly from the company that tie into holidays or birthday celebrations — further strengthening consumer loyalty.
Christopher Doering/Food Dive
Even now, Mondelez's marketing team has increased its online brand presence during the current pandemic by spending more time reaching out to consumers and their families at home. Its top brand Oreo has shared recipes involving the beloved cookie and challenged consumers to a TikTok contest where Mondelez will donate money to Save the Children as part of its $15 million commitment to fund coronavirus relief efforts.
"It's been a growing piece [of our sales]; clearly we're seeing a distortion in this environment," Walter said. "We're anticipating that a good portion of that will stick."
The reason, he said, is that while some consumers have turned to e-commerce to purchase their groceries, many more had yet to embrace it — that is until the pandemic. Now more people are going online to avoid large crowds in grocery stores. Shoppers also are finding they can get many of their favorite brands on Amazon or through e-commerce channels of their local supermarket chain just as easily as they could in the store itself.
"Clearly, e-commerce is going to continue to evolve, and I think we're well positioned and certainly making the investments to make sure we capture the opportunity to grow," Walter said.
Erin Lash, a director of consumer equity research at Morningstar, told Food Dive that with Mondelez and other CPGs increasing their online presence, it's important for companies to find a way to stand out among shoppers.
"Consumers, we don't believe, will peruse the limitless number of pages for particular products, and are likely to be reordering off a list or repurchasing brands that they're incredibly familiar with," Lash said. "And so, to the extent that Mondelez is first on that list or has brands that consumers have an affinity for, that is likely to prove advantageous."
