Mondelez adopts global marketing structure to boost biscuit brands
Mondelez International is moving toward a global marketing model for biscuit brands such as Oreo and Ritz to support the increased investment it is making to try and treble its size in the category by 2020.
Video: TV advert for Ritz Breaks
Biscuits are the snack maker’s second largest product category, generating 31 per cent of global food sales, but its brands are not category leading in some markets such as the UK. It has armed its marketers with a global and regional marketing structure to snare a larger share of the category by providing local topspin to more holistic customer experiences.
It is departure from the company’s previous framework, whereby brands were micro-managed in specific countries rather than regions. Mondelez hopes the strategy will give its five focus brands - Oreo, Ritz, Belvita, Barney and Mikado - the same fame and reach of Cadbury after lamenting its lack of universal products despite its status as the world’s biggest biscuit maker.
Rick Lawrence, UK biscuits category lead at Mondelez, says the business is “massively disproportionally” investing in biscuits as a percentage of revenue than it does for any other category. “Nothing is out of scope”, according to Lawrence, meaning if a product innovation or global idea can be proven to deliver commercially then the business will back it.
Mondelez is limited in what categories it can invest because of the cost of spinning off its coffee business earlier this year and the increased focus on biscuits reflects the need to unlock value from a category that is slowing in markets such as the UK and US.
Lauren Bandy, food analyst at Euromonitor, says: “Mondelez’s decision to invest in biscuits makes sense given that they’re trying to squeeze value from a narrow portfolio, where biscuits along with chocolate are its key markets. Any plans will need to address the fact consumers are lot more health conscious now and that probably accounts for some of the slow growth the category is seeing at the moment.”
Future marketing plans will be underlined by ongoing improvements to the way marketers from various markets work with the core European team out of Zurich. Regional marketers are increasingly asked to take more responsibility in sharing insights and shaping pan-European strategies with their colleagues.
Mondelez expects the structural changes to accelerate better-integrated campaigns in the coming months such as global push for its Belvita and Ritz brands. The campaign will ditch previous product-orientated messaging now the breakfast biscuit category has been established to focus on fostering emotional ties to consumers by showcasing the value of “small wins in everyday life”.
The outlay for the biscuit push stems from a $3.5bn (£2.1bn) restricting program from 2014 to 2018, which will deliver around $1.5bn (£879m) in annual cost savings by 2018.