How Mondelēz shifted focus from cost-cutting to growth
From creating a digital accelerator to piloting a biscuit subscription service, Mondelēz Europe CMO is spearheading innovation at the confectionery giant.
Mondelēz is embracing a new strategy as it looks to continue its pivot from cost-cutting to fostering growth.
Speaking at the Festival of Marketing last week, Mondelēz Europe CMO Debora Koyama explained how the company fosters innovation: “We are coming from a phase of cost-cutting and productivity and supply chain. To pivot about consumer, brands and growth, you have to be open to change and think about the business in a different way.”
To do this, Koyama has implemented a new 70/20/10 strategy, which she said ensures the core business is protected while also allowing Mondelēz to invest in experimentation.
“70% of recourse is delivering the core of the business, 20% innovation, and 10% real experiential,” she explained.
Koyama spoke about her time working as a marketer when the FMCG industry was focused on cost-cutting after 3G Capital’s acquisition of Kraft Heinz. That takeover, in 2013, saw 3G cut thousands of workers and factories, giving it market-leading leading profit margins that other firms wanted to emulate.
“It was all about efficiency and cost-cutting and profit, that became the benchmark for FMCG,” she said. “Every single company and the investor community was really asking [brands] to cut fat because 3G was the benchmark. And in the process, it’s easy to forget about consumers, which is why we are there in the first place.”
Putting consumers at the centre
Koyama is “passionate about putting the consumer at the centre” and Mondelēz has introduced new KPIs to measure the change in goals for the company. “You have to gear the measurements as well as the rewards towards your key objectives,” she said.
Koyama cited two examples of 10% experimentation: a UK digital accelerator and an ecommerce zero packaging platform.
The first, Ignite Labs, is a UK pilot that saw people from across the business pitch an innovation to encourage entrepreneurship. Last year, 21 employees were selected to attend a bootcamp before four finalists pitched their idea to senior leaders, with the winner’s idea securing investment.
The second is a subscription service for Milka biscuits, called Loop, launched in partnership with Terracycle. Consumers in New York and Paris subscribe online to receive customised and brand-specific durable packaging that is collected, cleaned, refilled and reusable.
Despite the environmental positives of the initiative, some in the business were cautious about it. “Loop was one example where many people were unsure because people are new to change. Some didn’t want the project. They said ‘why are you trying to do this?’,” she said.
However, her 70/20/10 strategy helped her negotiate with those who were less open to innovation.
“People ask me ‘are you trying to change everything?’ And I say no I am just trying to inspire people to change the way they think a little. That’s how 70/20/10 helps [because] we can explain that 90% [of the business] will continue to be working on core and innovation to deliver long-term strategy,” she explained.
For those looking to adopt similar strategies, Koyama advised: “Find a sponsor for your pilot and give space and time for it to come to fruition.”
She added: “We aren’t looking for ROI or top-line growth out of the experimentation.”
Koyama also spoke candidly about the need to ensure marketers are taking care of their personal, as well as professional, wellbeing.
“It’s a big learning for me,” she said. “I have had moments where I was about to burnout, and where I was out of my wellbeing.”
She also urged marketers to ensure they are constantly learning to stay relevant. “There is so much changing and evolving you have to keep learning and don’t have a mindset that you’re an expert on anything,” she concluded.
