Milling & Baking News - June 5, 2018 - 13

Business

A local emphasis central to
Mondelez's global strategy
NEW YORK - Since he took the helm as
chairman and chief executive officer of
Mondelez International, Inc., earlier this
year, observers have been interested in
what plans Dirk Van de Put has for the
company. In his first days as c.e.o., Mr. Van
de Put announced a strategic review that
will be unveiled in September. During a
presentation at the Sanford C. Bernstein
Strategic Decisions Conference on May 31
he offered hints at the changes he and his
management team may be considering.
One focus will be achieving a balance
between top-line and bottom-line growth.
"In the last four years, we have increased our bottom line by over 600 basis
points," he said. "We did that through
major restructuring of our supply chain.
We did that through implementation of
Z.B.B. (zero-based budgeting) and very
stringent cost exercise, plus we created
shared services. ... We now need to go
into the next phase, where the cost focus
still remains quite important, but we need
to combine that with top-line growth."
Top-line growth will come from a decentralized go-to market strategy and a
more agile innovation process.
"Our local teams need to be the drivers
of the agenda," Mr. Van de Put said. "And
the center needs to be in service of those
local agendas. So that's a big change for
us as a company.
"And, secondly, the whole model of
how you build brands, how you do innovation in this industry has changed. And
you need to be much more nimble, much
faster, experiment more. And that's also a
little bit opposite of what we used to do.
So those are two big changes that I need
to drive as soon as possible."

On May 7, Mondelez announced its
acquisition of Tate's Bake Shop, Long
Island, N.Y., for approximately $500 million (see related story on Page 11). The
company is a premium cookie manufacturer. When asked what plans the company had for the brand, Mr. Van de Put
was succinct when he said, "A lot."
Tate's Bake Shop currently has 40% distribution in the United States, and Mr. Van
de Put said Mondelez can "easily" expand

'While we feel that the world is more connected
than ever, the differences between consumer
behaviors and what they really want are bigger
than ever.'
- Dirk Van de Put,
Mondelez International

distribution to 90% to 100% of the country.
"They also are only really in chocolate
chip cookies," he said. "So, the brand
has possibility to extend itself into adjacent categories. And we also believe that
there might be a few markets around the
world, I'm thinking about the U.K. and
Australia, where the whole idea of Tate's
and the bakeshop could also appeal. So,
we expect the brand in the next five years
to be 3x, 4x what it is today."
Mondelez International has found success with its acquisitions of Enjoy Life
Foods and the Vietnamese brand Kinh
Do. But Mr. Van de Put said finding such
bolt-on acquisitions is challenging and
the company must place an equal emphasis on its internal innovation pipeline.
He said he sees the company's Chocobakery concept, which involves combining

Central Valley Ag buys out
Cargill's portion of joint venture
YORK, NEB. - Central Valley Ag Cooperative (C.V.A.) has announced a buyout of the joint venture with Cargill in
Progressive Ag Partners, L.L.C. (P.A.P.),
in Bradshaw, Neb. The buyout will give
C.V.A. full ownership of PAP effective
June 1.
"This buyout enables C.V.A. to provide more strategic focus on specialty
crops for our customers," said Matt
Ashton, senior vice-president of grain at
C.V.A. "We continue to look for ways of
bringing value to our customers, and we
view P.A.P. in Bradshaw as a strategic asset for our specialty crop programs."
bakingbusiness.com / world-grain.com

Mondelez's biscuits and chocolate brands,
as having a very long innovation runway.
"What it (Chocobakery) has is it's usually a very unique product that people do
not find," Mr. Van de Put said. "It's two
very powerful and very known brands,
and it's an intriguing combination.
"It was launched about three to four
years ago in Europe, and it keeps on
growing double digits in Europe. We've
launched in Brazil, where it's already taken 3% of market share in less than a year in
the biscuits market. And we launched it in
Russia, where it's also quite a big success.
So, we see here runway for that innovation

The facility is able to ship grain by
both truck and shuttle trains and has
enough rail capacity to ship 110 car shuttle trains.
P.A.P. was a joint venture, formed in
September 2002 between C.V.A. and
Cargill, offering the buying, selling and
storage of grain from producers in the
Bradshaw area.
According to Sosland Publishing
Company's 2018 Grain & Milling Annual
Central Valley Ag ranks 41st in North
American grain storage capacity with
44 million bus and has 22 grain storage
facilities. MBN

to be extended all over the world."
Mondelez International's product portfolio features a variety of snacks that are
impulse buys at retail. Mr. Van de Put
said the changes taking place at retail,
with sales shifting online and consumers ordering and picking up products or
having them delivered to their home, will
challenge companies that are reliant on
the impulse buy.
Using the company's Oreo brand as an
example, Mr. Van de Put said Mondelez
is working to replicate such impulse buying online.
" ...For the Americans here, Oreo is
consumed with milk usually," he said.
"So, if the consumer would be ordering
milk (online), he would get a pop-up
saying, 'Why don't you buy some Oreos
with the milk?' It's a different impulse,
but it's trying to stimulate that same behavior online."
When asked to name the biggest disruptive force that challenges Mondelez's
business, Mr. Van de Put said, "the consumer."
"And that means the local consumer,"
he said. "While we feel that the world is
more connected than ever, the differences
between consumer behaviors and what
they really want are bigger than ever.
And they're driven by online and the
availability of any product at anytime,
anywhere.
"So, for us to get that right and to adapt
ourselves as a big food company to do
that - change our innovation, change
our marketing, change the way we do
branding, change how we move and operate as a company - that is the biggest
thing we need to change." MBN
Milling & Baking News

June 5, 2018 / 13

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - June 5, 2018

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