The maker of Oreos and Ritz aims to be a ‘snacking powerhouse’

Alexia Elejalde-Ruiz
Chicago Tribune

The world is snacking. And Mondelez International, the food giant behind megabrands Oreos and Ritz, is angling to be a “snacking powerhouse” ready with the right cookie, cracker or nutritious cluster to fuel people through their days.

In its first state-of-snacking report, released last month, Mondelez reported that 60% of adults, and 70% of millennials, said they prefer to eat many small meals a day rather than a few large ones. Their snack choices are driven primarily by convenience and quality, and 8 in 10 said they want healthy, balanced bites.

In this Feb. 9, 2011, file photo, a shopper selects Oreo cookies at a Ralphs Fresh Fare supermarket in Los Angeles.

The report, based on a Harris survey of 6,000 people across 12 countries, came a year after Mondelez launched SnackFutures, an innovation and venture arm dedicated to developing next-generation snacks. This week Mondelez announced the hiring of Minsok Pak, who was head of strategy and innovation at Target, to lead SnackFutures and oversee mergers and acquisitions as chief strategy and transformation officer.

Other major moves to expand its snacking portfolio include last year’s $500 million acquisition of Tate’s Bake Shop, a Southampton, New York-based cookie brand; and this year’s majority stake in refrigerated nutrition bar startup Perfect Bar.

Not all of Mondelez’s adventures in snacking have been successful. Two years after launching Vea, a brand of seed crackers, crisps and crunch bars meant to appeal to millennials with flavors like Thai coconut and no artificial ingredients, Mondelez this year discontinued it.

The company, which in April will move its headquarters from Deerfield, Ill., to Chicago’s Fulton Market neighborhood, has seen its stock rise nearly 40% over the past year as revenue and profits improved. The North American business, which comprises about a quarter of the company’s revenues and profits, grew 2.5%.

Helming the North American business is Glen Walter, who joined Mondelez in 2017. He previously was CEO of Coca-Cola in China and earlier in his career served as CEO of beer company InBev USA.

The interview has been edited for length and clarity.

Q: What are some of the challenges Mondelez’s North American business faces?

A: We all shop in different ways. One of the opportunities we have in North America for profitable growth is to continue to expand our snacking footprint outside of our traditional retail universe – food stores and the mass channel. They will continue to be incredibly important to us, but expanding our snacking portfolio to where consumers are shopping, whether that be convenience stores, in e-commerce, whether it’s pure play or omnichannel is an area of opportunity for us.

Q: Are there any unusual places where you want consumers to be able to find Mondelez’s products?

A: The dream is obviously ubiquity. Wherever consumers are and want to snack we want to be within reach of that. We are expanding our food service business, so it could be an Oreo milkshake that shows up in an Uber Eats, to products you might find in the club store channel. Hopping on an airline – there are various airlines now where you can find Oreos and Sour Patch Kids and belVita.

Q: What’s notable about how Americans snack?

A: My wife and I have three kids who are 14, 11 and 8, and I think time is our most precious commodity and strain. As much as we’d love to sit down and have three square meals, people are eating very differently. Everybody is changing from three square meals to multiple smaller meals and snacks. And you can see that from boomers to millennials. The types of snacks are different. It could be meal replacement, could be an energy boost, could be a chance to connect with friends socially.

Q: Are you focusing more on healthy or indulgent snacks?

A: There’s definitely a crossover. This whole idea of well-being, whether I want to have a delicious Double Stuf Oreo, one a night, as my chance to take a breath and have a simple indulgence for mental well-being. Or whether it’s something you’d see with a Perfect Bar or Enjoy Life. We want to have a wide range of choices, whether in the types or products or the package sizes.

Q: What went wrong with Vea?

A: Vea would be a great example of something that the product itself was not a success but the learnings we had on consumer behavior, on the product itself, has been highly instructive.

Q: What did you learn?

A: There is a very real snacking ritual on munching. There’s this idea of bag to mouth. That can be indulgent, that can be savory, that can be more pure well-being. There are clearly individuals who are moving from traditional bars into bites. Some of the insights we had around the consumer, they can be tactical things. Piece sizes – do they look too well-formed versus more natural clusters that can be broken into a homemade granola?

Q: What do you hold up as innovation successes?

A: Oreo is almost three brands within this master brand. We have the base Oreos and we continue to delight consumers with exciting new flavors, we have the Mystery Oreo campaign now where consumers are engaged and competing for a prize each month. We also have Oreo Thins. Whether it’s calorie content or they like something that’s a big less sweet, Oreo Thins has been really successful and incremental. The third pillar is more indulgent, with smaller piece sizes of the full-size Oreo, enrobing them in delicious fudge and chocolate.

The key in this is not innovating for the sake of innovating. It’s understanding where is the consumer, how are they snacking, how do I understand my brand, where can I stretch that brand into a snacking demand space to try to create an incremental moment that consumers enjoy our brand.

Q: After spending five years in China, was there anything notable about Chinese versus American consumers?

A: The speed at which disruption is happening in where consumers are buying their products. The size of e-commerce, speed of delivery, importance of how your brands are presented. Whether it’s on Alibaba there, or here on Amazon, the pace at which they’re looking for convenience and want to be able to purchase those snacks in alternative and different channels is happening very rapidly.

Q. You a few times have mentioned being “constructively discontent.” Where did that come from?

A: I don’t know where it came from but I would say that that’s just been a mindset that I’ve had. I believe in laying out a bold ambition that’s got to be grounded in facts. I do believe if you’re going to lead anything, be the best at anything, this idea of being constructively discontent is certainly celebrating your wins along the way but always knowing there’s more you can do and continuing to push and provoke, and we’re trying to keep that balance in what we’re doing.