Mondelēz pilots innovation hubs as it shifts focus from costs to growth

Mondelēz is piloting cross-functional innovation teams that it hopes will allow it to adopt a more flexible and faster approach to new products as the business shifts focus from costs to growth.

The food company, which owns brands including Cadbury, Oreo and Ritz, has already invested in a network of 11 innovation centres globally. And as part of that it has adopted a more flexible test-and-learn approach so it can launch small-scale innovations faster and learn from the results.

The move comes as CEO Dirk Van de Put, who took on the top job 18 months ago, shifts the company’s focus from bottom-line cost-cutting to top-line growth. That involves “re-energising” its so-called ‘power brands’ while also adapting faster to local markets and changes in eating habits and ways of buying.

“Moving from the past focus on costs, we see the possibility to unlock further opportunities as we shift our mindset towards growth. We are creating a nimble and powered organisation with a winning attitude and the right incentives to drive the right behaviours,” he says, speaking at the Consumer Analyst Group of New York conference yesterday (19 February).

“We know that in order to succeed in the long-term we have to change the way we innovate, focusing on speed over perfection and agility over process.”

One such innovation hub is SnackFuture, which is focused on opportunities in wellbeing, the premium market and digital platforms. It brings together teams from brand marketing, consumer insights, research and development, innovation and corporate development to identify areas of growth for the snacks business.

Led by chief growth officer Tim Cofer, it has been tasked with contributing $100m to revenue growth by 2022. And it has already seen the launch of products including Cadbury Joy Fills in the UK and Oreo Rainbow products in China.

We know that in order to succeed in the long-term we have to change the way we innovate, focusing on speed over perfection and agility over process.

Dirk Van de Put, Mondelēz

“SnackFuture is unique because it combines inventing, reinventing and external venturing under the same roof,” explains Van de Put.

The innovation hubs are part of wider changes at Mondelēz so it can move faster on new opportunities. It has already restructured its marketing team, bringing in four regional chief marketing teams under one global CMO as part of a wider overhaul of the business that focuses it into 13 geographic units across four regions set up to make most decisions local, including on innovation, portfolio and investment, and incentivising on a local level too.

READ MORE: The three Fs and five Cs – Mondelēz’s new marketing approach

“It makes accountability very clear and very direct,” adds Van de Put. “We see opportunities to invest and grow our business.”

That investment will also be put into marketing, with Mondelēz’s CFO Luca Zaramella describing 2019 as a “stepped up investment year” that will see more money given to local brands to grow their sales, although it plans to “keep momentum” in global brands.

That includes Cadbury, which was supported through a new brand marketing campaign last year focused around its brand purpose of generosity. Van de Put claims that repositioning “connected really well with our consumers”, leading to a six-point increase in brand consideration and a rise in organic net review in mid-single digits in 2018.

Cadbury also benefits from its “agile innovation approach”, launching new products such as Freddo’s Little Treasures while also using Cadbury as an “umbrella brand” for more occasions such as in the bar segment through the launch of Crispello and “reinvigoration” of Fuse.

“To drive this growth, we are using a deeper understanding of our consumers to find areas to drive incremental growth,” says Van de Put. “Our agile innovation approach focuses on making sure that Cadbury remains the taste of the nation among our younger consumers.”