Snack giant Mondelez International to reduce 25 per cent of its products

July 13, 2020 | 21:17
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Mondelez International – the world’s leading snack corporation and the parent firm of Kinh Do Mondelez Vietnam – announced that it would reduce its product portfolio by approximately 25 per cent.

“That’s always a discussion at a company like ours, that we have too many flavours, too many sizes, and so on,” chief executive Dirk Van De Put told Bloomberg. “This is the moment to drive that.”

Accordingly, Mondelez aims to specialise in individual product varieties or stock-keeping units (SKUs). Van De Put, however, did not mention which products or brands would be abolished.

snack giant mondelez international to reduce 25 per cent of its products

Mondelez International is streamlining its portfolio, but it is unsure yet which brands will disappear

Packaged-food manufacturers have seen demand soar during the coronavirus pandemic as consumers stuck at home stock up their pantries. The situation, however, has exposed the challenges of maintaining such an expansive product mix.

Contrary to other sectors which have been hit hard by the outbreak, the confectionery industry has witnessed an increase in demand since people have bought packaged-food. Nevertheless, the outbreak has created certain challenges for Mondelez to maintain its expansive product mix.

The US-based multinational confectionery, good, holding, and beverage corporation employs approximately 80,000 employees across the globe.

In the 2014-2015 period, Mondelez acquired 80 per cent of Vietnamese firm Kinh Do Corporation’s snack business for around $370 million.

In 2016, the international giant successfully bought out the remaining 20 per cent stake in Kinh Do, equivalent to approximately $90 million in a bid to boost its local footprint.

The maker of Oreo cookie believes in the massive growth opportunities of the Vietnamese market. Five years after entering the Vietnamese confectionery market, Mondelez Kinh Do Vietnam has announced it would continue to strengthen its position in the bakery and confectionery market by delivering new disruptive innovations.

According to Bloomberg, Mondelez is not alone in slimming its product lineup, a process known as “SKU rationalisation” that cuts down on inventory and packaging costs, and eases logistics for online ordering. General Mills Inc. is trimming its soup offerings by nearly half.

A recent report from Euromonitor shows that the implementation of social distancing policies and city (or country)-wide lockdowns mean many out-of-home options are off the table.

By Nhat Minh

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