Mondelez prepares for the next stage of the crisis

President Martin Parent explains how the CPG co is anticipating demand and stocking shelves as a new pandemic phase begins.

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By Martin Parent

At Mondelez Canada, providing a safe work environment for our 2,600 employees across retail, logistics and our five Ontario-based factory operations remains our first priority.

Today, hand-in-hand with that priority, we are focused on working closely with our retail partners to ensure we keep shelves stocked for Canadians during this pandemic – and beyond. It’s a mandate that requires understanding how consumer needs will continue to evolve as we enter a “new normal.”

Increased snacking is not a fad

While there have been various spikes in pandemic panic purchasing, from toilet paper to hair dye, snacking is here to stay. More than two months into the pandemic, our data shows snacking is up by 50% among Canadians, and we do not expect this to slow down.

Initially, we attributed the growth to pantry loading. However we saw that, with most eating now taking place in the home, there’s greater importance on sharing moments, cooking and indulging together as a household. While we expect to see some degree of a return to out-of-home eating, post-COVID-19 financial constraints will mean in-home eating is not going away.

Looking at China, which is further along the road to recovery, a recent Nielsen study found that 86% of respondents there said they will eat at home more often than before the outbreak.

Even before this pandemic, our first annual State of Snacking study showed that Canadians were turning to snacking for comfort and emotional well-being. Additionally, our investment in our Demand Spaces, a global “snacking database” based on interviews with approximately 170,000 consumers, has helped us understand the drivers of snacking by looking at unique emotional and functional needs, such as the “evening unwind” moment shared between parents once the kids are in bed, where snacking products like Cadbury Dairy Milk feature in people’s lives – now more than ever with the kids being at home all day.

Oreos

With an increased desire to snack for comfort, we also see consumers rekindling relationships with iconic brands and products that make them feel good, happy, nostalgic or reassured. Notably, we’ve seen significant growth in Canadian sales of our global brands like Oreo and Cadbury and in sales of local brands such as Premium Plus, Crispers and Cadbury Caramilk.

We will look to capitalize on this momentum through marketing investments that support those brands. For example, later in the summer, we will launch a campaign for Cadbury Caramilk that plays on the brand’s iconic “secret”-inspired platform.

Shoppers are going “back to the future”

With both a return of the traditional large weekly visit to the grocery store, and a simultaneous leap forward in online food shopping, we are seeing shoppers go back to the future.” As Canadians shop for both instant gratification and future consumption, we’re also seeing more items purchased per visit and larger product formats being favoured.

While we may see some return to more frequent store visits as public health concerns abate, we expect the economic impact of COVID-19 to have a longer-term impact on shopping habits. For example, during the 2008 recession, we saw a trend towards fewer, but more consolidated, shopping trips, as well as shoppers becoming savvier on ways to save money by seeking out value.

Simplicity is key to meeting demand

This increase in snacking and desire for iconic brands, combined with fewer shopping trips, means that it’s never been more important to ensure the right products are available at the right time and in the right format.

Knowing that people will snack more for the remainder of the year, we’ve reduced complexity in our business and portfolio, which in turn is helping our retail partners better manage their in-store availability around the products Canadians want to buy now.

As a result, we are streamlining our portfolio offerings to focus on key items, such as larger formats of Sour Patch Kids candy for the spring/summer season. By concentrating our production on key products, we’re helping keep both our physical and virtual shelves stocked.

Simplifying our product portfolio is our long-term strategy to ensure the products people want are always available; it also streamlines our supply chain and makes it quicker to respond to change and easier to keep colleagues safe.

Even after this crisis, when the spotlight has faded once again, these new simplified and agile ways of working together for the benefit of all Canadians will stay with us all.

Martin Parent is president of Mondelez Canada.