“It’s allowed us to expand on our core [and] bring in new price pack architecture for different snacking occasions or channel expansion or new innovation that is hitting the marketplace,” Walter noted.
Despite trimming 25% of its SKUs, the company has maintained shelf space, Walter said. It’s also provided more shelf efficiency for its retail partners during a moment when “there’s simply no room for inefficiency on the shelf when they’ve got labor looking to pick orders for people who are pivoting into more e-commerce.”
Walter, who also served as president and CEO of InBev USA, shared insight on how Mondelez’s DSD network is providing a competitive advantage. Noting that the DSD model would be massively cost-prohibitive to enter today, having it has led to profitable growth for everything from speed to market and in-stock conditions, to customer partnerships for trade promotion investments.
Mondelez has integrated half of its Tate’s Bakeshop business, which it acquired in 2018, into DSD, resulting in revenue growth, shelf expansion, average items carry and display penetration, among other benefits. DSD also supports innovations like its limited-edition Lady Gaga and Olympics Oreo packs, and the company may also leverage it against its confections business moving forward — including its Halls brand during cold and flu season — to get its traditional warehouse brands executed in the marketplace.
“It’s a huge capability. It’s a big investment. We continue to optimize that using technology, understanding how e-commerce and click-and-collect is changing shopping behavior, [and how we] ensure that we’re evolving DSD capability to be a competitive advantage and to continue to be very, very thoughtful on the overhead investment and really evolve that over time,” Walter said.