Snack food giant Mondelez Australia creates product lab to snare shoppers

Snack food giant Mondelez Australia creates product lab to snare shoppers


Mondelez Australia, one of Australia’s largest food companies, has established an innovation hub to fast-track new products and routes to market in response to growing consumer demand for healthier, more convenient snacks.

A “growth team” set up outside Mondelez’s core operations in Melbourne has been tasked with exploring opportunities such as healthier snacks, on-the-go and convenience foods, new channels such as e-commerce and licensing, and potential collaborations with external partners.

“Consumers are changing quite quickly and we have to continue to innovate and move more quickly and experiment and test and learn quicker than we have done in the past,” said Mondelez’s new Australian managing director, Nigel Parsons.

Amazon

Mondelez Australia managing director Nigel Parsons wants to grow sales at least 3 per cent a year by better catering to changing consumer eating habits.
 Eamon Gallagher

“We’ve set up a growth team outside the business looking specifically from an agile mindset around what are some of those white-space growth opportunities we want to go after, where and how are these platforms going to be unlocked – is it own manufacturing, is it co-manufacturing – how do we become more nimble in bringing those products to life.

“We are interested in understanding partnerships and joint ventures where we don’t have the internal capability or portfolio to go after an opportunity quickly.

“There’s also an opportunity for us to think more holistically about channel – we are obviously centred in retail in Australia – how do we think more around e-commerce and omnichannel.”

Mondelez is the second largest snack-food company in the world after Pepsico, and the largest in Australia, especially in chocolate and confectionary, with brands including Cadbury chocolate, Oreo cookies, The Natural Confectionery Company and Pascall lollies, Philadelphia cheese, Ritz and Captains Table crackers and belVita breakfast biscuits.

Mr Parsons, who took the helm of Mondelez’s Australian operations in October after 25 years in fast-moving consumer goods, is aiming to boost annual sales growth to at least 3 per cent – in line with category growth and the group’s global growth forecast – following years of cost cutting and restructuring.

Mondelez’s sales from continuing operations rose 1.5 per cent to $1.49 billion in calendar 2017 (the latest accounts available) following the sale of Vegemite and Mondelez’s grocery business to Bega Cheese earlier that year.

BEGA CHEESE

Mondelez Australia, which owns Cadbury, has established an innovation hub to fast-track new products and routes to market.
 Paul Jeffers

Mr Parsons said Mondelez is committed to its four remaining manufacturing sites in Australia and plans to invest another $400 million over the next five years after spending $380 million over the past five years, including $20 million last year on a new robotic packaging line at the Cadbury plant in Tasmania to wrap Flake and Twirl bars more efficiently.

“We’re very positive about ongoing manufacturing in Australia,” he said. “There are a lot of pressures in terms of domestic growth, the cost of freight [and] energy, and there’s been strong price deflation in the marketplace for the last six years.”

Mondelez, which makes about 90 per cent of products locally, needed to be cost-competitive and boost volumes for Australian and regional manufacturing sites.

Under a new “local first” strategy launched by global chief executive Dirk Van de Put, countries will have more responsibility for profits and more input into decisions on capital investment, new product development, marketing, promotions and channels to market.

Melbourne accelerator

Mondelez’s new Melbourne accelerator is similar to, but separate from, SnackFutures, the global innovation hub established last November to invent new brands, reinvent small-scale brands with large-scale potential and collaborate with start-ups to seed new businesses.

Mr Parsons said Mondelez would expand the three-person team and invest additional resources once growth opportunities were identified.

“We’d love to believe we could land something in 2019 but realistically once you bring products to market its probably 2020,” he said.

In the meantime, Mondelez’s core business has been tweaking its existing products in response to consumer demand for healthier, more convenient foods and portion-control, launching a new line of Natural Confectionery Company jellies with 25 per cent less sugar and bite-sized versions of belVita breakfast biscuits and Oreo Thins. A Cadbury chocolate block with 25 per cent less sugar is on the drawing board.

It has also been venturing into new channels, establishing a dedicated Cadbury e-commerce site last year, selling online through Woolworths, Coles and Amazon and partnering with Myer and Cotton On to sell personalised Toblerone bars and Oreos before Christmas.

Mondelez has also announced plans to make all packaging recyclable by 2025 and is investing in sustainable sourcing and solar energy, installing solar panels at its Mt Gambier cream-cheese plant and Scoresby candy plant.

“Consumers are a lot more conscious nowadays about sustainability and sourcing, where their products are manufactured,” said South African born Mr Parsons, who came to Australia in 2006 with Kraft.

He declined to comment on potential acquisitions.Mondelez hired Morgan Stanley in November to help it assess a bid for Australia’s largest biscuit maker, Arnott’s, which is up for sale as part of Campbell Soup’s auction of its international business.

A successful bid for Arnott’s wouldboost Mondelez Australia’s ANZ sales by more than $1 billion.

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