Mondelez
to boost ad spending, healthier offerings
Send a link to a friend
[September 10, 2015]
By Anjali Athavaley
NEW YORK (Reuters) - Snack maker Mondelez
International Inc will spend more on advertising its brands, increase
healthier offerings and expand its e-commerce business to boost sales as
consumers eat less processed food, an executive overseeing the company's
growth strategy said.
|
Mark Clouse, Mondelez's chief growth officer, said in an interview
that the company plans to increase its advertising spending to 10
percent of revenue by 2018, up from 8 percent last year. The maker
of Oreo cookies, Cadbury chocolate and Triscuit crackers also aims
for its e-commerce business to grow to $1 billion in 2020 from $100
million today.
Additionally, Clouse said that in the next five years, Mondelez
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.
"If you look at where consumers are going, we have to better
position the portfolio to fully unlock the potential for growth,"
Clouse said.
![](http://archives.lincolndailynews.com/2015/Sep/10/images/ads/current/napa_bch1-3108.png)
Since it became a stand-alone company in 2012, Mondelez has mostly
focused on improving its profit margins through 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.
Until now, it hasn't given many details on how it plans to invest
those savings to achieve higher sales growth. Clouse said the
approach involves changing existing products to suit consumer needs
and moving into new markets and categories that offer growth
potential. In February, Mondelez said it was buying Enjoy Life
Foods, the maker of allergen free snacks, for an undisclosed amount.
The efforts come at a time when packaged food companies, faced with
sluggish growth, are increasingly under pressure from investors to
change their offerings and slash costs.
[to top of second column] |
![](http://archives.lincolndailynews.com/2015/Sep/10/images/ads/current/christian_village_lda_022015.png)
In August, billionaire investor William Ackman's hedge fund Pershing
Square Capital Management disclosed that it spent $5.5 billion for a
7.5 percent stake in Mondelez in what was seen by Wall Street as an
attempt to push the company to increase its margins further or
potentially sell itself. Investors and analysts have speculated that
the company could combine with Kraft Heinz Co.
Kraft and Mondelez used to be the same company until their split in
2012. Last March, Kraft said it was merging with ketchup-maker H.J.
Heinz Co in a deal backed by 3G Capital, a Brazilian private equity
firm known for cutting costs.
Clouse said of 3G's abilities that "there's no doubt that those are
our fundamental capabilities and skill sets that are really
important in today's world."
He added, "The key is, can you bring the same operational discipline
and clarity to a growth agenda that allows you to sustain it over
time. I think that's really what we're shooting for."
(Reporting by Anjali Athavaley; Editing by Andrew Hay)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
![](http://archives.lincolndailynews.com/2015/Sep/10/images/ads/current/class_rent_bch.png)
|