Healthier Snacks Are Major Focal Point for Mondelēz
DEERFIELD, Ill. — Mondelēz International Inc. is boosting its investment in healthier food offerings.
The move, which comes as consumers are opting for less processed food, will be combined with more advertising spend and an expansion of the company's e-commerce business, according to a report by Reuters.
Specifically, Mondelēz plans to increase its advertising spending to 10 percent of revenue by 2018, up from 8 percent last year and grow its e-commerce business from $100 million today to $1 billion in 2020, said Mark Clouse, Mondelēz's chief growth officer.
In addition, he said that in the next five years Mondelēz hopes to generate half of its revenue from snacks perceived as healthier, up from a third currently. This includes individually wrapped snacks that are 200 calories or less and products that have nutritional attributes, such as fewer ingredients and no artificial flavors, according to the report.
"If you look at where consumers are going, we have to better position the portfolio to fully unlock the potential for growth," Clouse said.
According to Reuters, since it became a standalone company in 2012, Mondelēz has mostly focused on improving its profit margins by reducing its expenses. The company is in the midst of a plan to cut about $3 billion in costs by the end of 2018 through measures such as opening more efficient manufacturing plants and zero-based budgeting, which requires expenses to be justified for each new period.
The company is now detailing on its plans to reinvest those savings to reach higher sales growth. According to Clouse, the approach involves changing existing products to suit consumer needs and moving into new markets and categories that offer growth potential. In February, Mondelēz said it was buying Enjoy Life Foods, the maker of allergen-free snacks, for an undisclosed amount.