Mondelez Investing to Maintain Digital Momentum

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Mondelez Investing to Maintain Digital Momentum

By Lisa Johnston - 11/03/2020

Mondelez International is accelerating some of its growth initiatives in order to maintain its e-commerce momentum.

The company reported net revenue growth of 4.9% in the third quarter. E-commerce revenue grew 78% during the period to represent 5% of its revenue base.

As the No. 19 consumer goods company continues navigating the pandemic, it’s increasing investments in digital media, as well as data-driven engagement and an improved online shopping site. CEO Dirk Van de Put said in an earnings call that the company sees the United States and China as the regions with the most e-commerce headspace, and it will for the first time spend more on digital media than it does on television advertising.

In addition to expanding its assortment to meet channel needs, Mondelez also sees opportunities in its ability to recreate impulse experiences online. This will entail investing in its consumer data to create stronger connections, as well as experimenting with such other e-commerce initiatives as B2B and direct to consumer.

Van de Put noted that the company’s margins are similar online and offline.

Mondelez expects to be about three-quarters of the way through its previously announced SKU rationalization plan by the end of the year. This will eliminate 25% of its SKUs, representing 2-3% of its revenue.

The simplification of its assortment is expected by Mondelez to drive both top-line and bottom-line growth and cash flow, with additional benefits experienced in manufacturing and customer service.