The Oreo King Talks About Comfort Food and Supply Chains
(Bloomberg Businessweek) -- Mondelēz International CEO Van de Put runs a snacks empire, everything from Oreo and Chips Ahoy! cookies to Cadbury and Toblerone chocolates. That’s not a bad place to be during a stay-at-home pandemic.
To streamline manufacturing, Mondelēz is reducing its number of product sizes or flavors by 25%. It has beverage exposure through stakes in coffee maker JDE Peet’s and Keurig Dr. Pepper. Mondelēz has patented a new process to make chocolate, cutting sugar by 50%.
The pandemic has left many people stuck at home. How’s that been for business?
We see an increase in in-home snacking. There’s a pronounced change of the consumer eating a lot more in their homes and less in restaurants, less on the go. But gum or candy bought in convenience stores is a negative vs. previous years. Consumers also want a little bit more normalcy—they want to feel good, safe. So they snack more and go a little bit more to comfort food. They also go back to brands they know and love. So we see that effect, that our market share in our big brands is growing quite a bit.
With the potential of a second wave, do you start stockpiling some ingredients?
Yes, we’re prepared for stockpiling ingredients because our suppliers could have problems, too. We start to look for temporary workers or increase our workforce to make sure that we can keep our supply chain going and our sales force going. We reinforced all the measures that we have in our plants and in our offices, but we also spend a lot of time with our people talking about how to behave outside of our facilities to make sure they stay safe and healthy.
Did you have supply chain disruptions?
Sometimes a plant had to shut down for two, three days because our workers couldn’t get to the plant. Or we had to negotiate with the government so our plant could continue to work in some countries. Overall, we’ve been able to keep our supply chain going largely.
What is Mondelēz doing about social justice and diversity?
We’ve made good progress, but we need to do a lot better. It’s about hiring and development programs. Culture is the second big act, this commitment to inclusion and belonging, and a constant dialogue about that. Also, we want our brands to be driven by a purpose and representative of our consumers.
The conversation at many companies has shifted toward diversity. How important is that?
If you have a diverse table with different opinions, different viewpoints, and you’re really open to listen to that, in the end you’re better informed and you will make better decisions. No doubt about it. I think the issue is more that you tend to recruit or surround yourself with people who are the same as you. It feels more comfortable, and it’s not necessarily conscious that that happens. And so you need to make sure that you’re consciously making decisions to get that diversity surrounding you. And I think that’s what often happens in companies—that there’s all the right intentions, but when push comes to shove, it’s not changing. So you need to be more proactive, and I think setting quotas or setting targets is one of the ways that you drive that change.
You’ve already been boosting the numbers and opportunities for women at Mondelēz.
It starts with putting clear targets out there.
Quotas or targets?
Yes, quotas. I call it targets, but it’s the same thing. It’s the percentage of women that we want to have in different levels of the company, from factory workers to white collars to junior management, middle management, and higher management. We’ve driven about a 3% increase across the board roughly—more at the higher levels—in the last 18 months. As a company, at the moment, we are about 62% men and 38% women. And a year ago, we were probably around 35% women. So that’s the change that we’ve driven in a year. That’s not enough, but I’m happy with what we are seeing happening. So how we’ve done that, first of all, we’ve put the quota. Then we’ve made sure that always, as we recruit or promote, that the slate of candidates is balanced and that there is a good mix.
Is the current environment forcing you to change some of your marketing?
We see a number of things happening, and we need to adapt to them. To give you a little bit of a flavor, we had to adapt our communication because people are sitting at home and some of the communication we have on our brands is all about getting together with your friends or being out. Well, that doesn’t play a role [now]. For instance, with Oreo in China, we started to discover that we needed to really focus our communication on how to cook with Oreo and how to use Oreos in your recipes at home. We would normally never have done that, but in this case, we had to.
There’s a lot of talk now about wellness and fitness and the concern about the nutritional impact of snack foods. What are you doing to improve the nutritional information on your product packaging and also provide more products along that line?
It is a priority because our purpose as a company is to empower people to snack right, which means we want to let the consumer make the decision. But we need to help them make the right choices for them. That means putting the right information on the back [of the package] and also educating them. So we’re all in favor of clear nutritional declarations and simplicity so the consumer can immediately see what’s in the product. But one of the biggest things we can do is help consumers make the right choice as it relates to the quantity they eat. We have this program called Mindful Snacking, which means really being in the moment and understanding when you’re snacking what you’re eating. And sort of enjoy the taste, for instance, but grab things with your left hand instead of your right hand if you’re right-handed, so you know each time that you’re taking another snack. So we put portion size information on all our packs. We also want to increase the number of our snacks that are 200 calories or less to 20% of our sales. It starts with putting clear targets out there.
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