Mondelez backs core brands to drive growth
Mondelez has vowed to increase marketing investment for its core brands such as Cadbury and Dairylea as the business is formerly spun off from its North American grocery counterpart.
Mondelez International started trading yesterday (2 October) as the chocolate and confectionery arm of Kraft following a demerger earlier this year. The business is focusing on the snacks market while its North American counterpart Kraft Foods Group will maintain its focus on the broader food market.
Mondelez is to ramp up the marketing activity around its core brands, spanning across five categories; chocolate, coffee, gum and candy, biscuits and cheese.
The company says the performance of its chocolate business, which will account for 27 per cent of the company’s sales, is “key” to delivering growth during its first year of trading. It adds that it is planning to boost investment in its Cadbury Dairy Milk, Milka, Lacta and Toblerone ranges alongside launching brand extensions through its ‘Bubbly” and “Bite-Sized” variants.
Additionally, the business has said that it has taken action to reverse a recent slump in gum sales with the launch of a new chewing gum brand at the end of the year.
The company claims that “snacking categories are growing faster than non-snacking categories, particularly in developing markets such as Africa and the Middle East, where it expects the majority of its initial growth to come from.
However, Maurizio Brusadelli, president of the UK and Ireland at Mondelez, says Europe can still play a “critical’ role on the company’s global snacking strategy.
He adds: “We are the second largest business out of the 170 markets in which Mondelez International will operate, as well as being home to the global R&D centers for chocolate in Bournville and coffee in Banbury. Any new chocolate products launched anywhere the world by Mondelez International will have been developed by the team in Bournville.”
Separately, Mondelez is reviewing its global media strategy to ensure that future campaigns have a “seamless integration” between digital and traditional media channels. It is hoped the move will give its advertising better cut through with young adults.
Earlier this year, the business warned that the costs associated with the demerger would hurt earnings in the short term. It backed its brand building activity to deliver long-term growth, adding that “the benefits associated with the split certainly outweigh the costs.”