BOSTON — For Mondelez International, Inc., a focus on thin is a win. In the two years since the snack maker launched its Thins platform, which includes Oreo Thins and Chips Ahoy! Thins cookies and Good Thins crackers, these products are expected to surpass $300 million in sales, said Tim Cofer, chief growth officer of the Deerfield, Ill.-based company.
The Thins innovation is part of Mondelez’s efforts to become the global leader in well-being snacks, with half of its revenue coming from this segment by 2020, Mr. Cofer said during a Sept. 7 presentation at the Barclays Global Consumer Staples Conference in Boston.
|Tim Cofer, chief growth officer of Mondelez|
“To reach this goal, we’re expanding the permissibility of our existing portfolio by simplifying and enhancing the ingredient and nutritional profile of our base business,” he said. “We’re also filling our pipeline with new products. This includes brand extensions like organic Triscuit, but also global innovation platforms such as Wholesome Thins.”
This contemporizing of the core portfolio is one of three pillars of Mondelez’s growth plan, which also includes filling key consumer and geographic white spaces and expanding availability of products across channels, including e-commerce. These three strategies were developed in response to shifts in how consumers live, eat and shop, Mr. Cofer said.
“First, consumers are increasingly interested in well-being, both in developed and emerging markets,” he said. "The second power shift is time compression. Across the world, consumers are working more hours with longer commutes, and this affects how they eat, leading to more consumption of meals in between or on the go. Third, a growing income gap is challenging traditional definitions of the consumer at both ends of the economic spectrum. More affluent consumers are seeking premium products, while aspirant consumers are increasingly buying branded goods.
“Fourth is the digital revolution. The proliferation of digital, social and mobile platforms is shaping how consumers interact with brands, putting consumers in the driver’s seat. And finally, the evolving retail landscape. There’s growth in small-format stores such as traditional kiosks in emerging markets and convenience stores in developed markets. At the same time, discounters continue to expand and influence consumers’ value perceptions. And e-commerce is emerging as the highest growth retail environment.”
In addition to expanding well-being snacking options, such as the Thins items, Mondelez is offering product formats that address new occasions and shifting more of its marketing spend to digital and social media from traditional advertising channels.
“Contemporizing our core business begins by connecting our consumers with our iconic brands through bigger, stronger and more disruptive ideas,” Mr. Cofer said. “We call this fearless marketing. It’s our way to encourage bravery within our marketing organization and accelerate growth through better work.”
The second pillar of Mondelez’s growth plan, filling white spaces, includes expanding premium offerings as well as more affordable formats. The company also is increasing its presence in the U.S. chocolate category.
“We’re making a big splash in the U.S. chocolate market with a significant expansion of our Green & Blacks brand as well as the introduction of Oreo to our chocolate portfolio,” Mr. Cofer said. “The U.S. is the world’s largest chocolate market. It’s about a $14 billion market. And while it’s big, per capita consumption in the U.S. is only half of what it is in many developed European markets. We have a very small presence in U.S. chocolate today, so entering this category represents a significant white space growth opportunity for us.”
In the premium segment, Mondelez is introducing a new range of Green & Blacks 70% dark chocolate tablets made with sustainably sourced cocoa and no artificial flavors, colors or preservatives.
“And in the mainstream segment, we’re pairing Oreo, America's favorite cookie, with Milka, one of our most iconic European chocolate brands,” Mr. Cofer said. “This unique cross category innovation really delivers on what consumers want: favorite brands, a great sensory experience, and more variety.”
Third, Mondelez seeks to strengthen sales and distribution capabilities across channels and enhance in-store execution in brick-and-mortar retailers.“In the on-line arena, we’re building an industry leading e-commerce snacks business, targeting at least $1 billion in revenue by 2020,” Mr. Cofer said. “To reach this goal, we’ve staffed up with a dedicated cross-functional team of high potential internal colleagues and experienced talent from leading e-commerce companies. And to drive growth, we’re making sure we have the right assortment of our power brands in stock, ready for purchase, building strong content, including product reviews, optimizing search, and investing in compelling programs to increase traffic.”