MDLZ China new leader makes his debut after taking office for 100 days, and we caught up with him

Today, Mondelēz China launched Stride Waves, a new gum product, at an event in Beijing. Among those attending were Stride's brand ambassador William Chan, and Joost Vlaanderen, the new Managing Director of Mondelēz China, who has been in office for just 100 days.

For Joost Vlaanderen, a Dutch national who has worked in more than ten international markets since he joined Mondelēz. Seven years ago, joining the China team has been the realization of a career dream. So, three months after his dream came true, what knowledge and insights has he gained about the China market? And what will be the business focuses for Mondelēz in China? With these questions in mind, let's take a look at the reporting by Foodinc below.

“Favorite brands”

For Vlaanderen, China is attractive to him not just because of its huge size, but also, more importantly, because the speed of the market in responding to changes is refreshingly fast.

He said that, over the past 100 days, he has communicated with over 100 Chinese colleagues, and also visited three regional markets (North, East, and South) and all Mondelēz's factories, as well as the Suzhou RDQI Technical Center, which was completed not long ago.

“These factories represent the latest technologies of Mondelēz,” said Vlaanderen. “I've been with Mondelēz for nearly 20 years, and I can say that our European colleagues will be jealous when they see the factories in China.”

Among the numerous power brands of Mondelēz, which ones are most promising in China?

“I personally think that there will be a series of brands, and Oreo is no doubt one of them. The real potential of Oreo is far from being unleashed,” Vlaanderen told Foodinc. He also thinks other favorite brands such as Stride and Milka have great potential still to be tapped.

He said that Stride has been growing each year since it entered China six years ago, and has been launching innovative new products. Although the chocolate market is very much differentiated, Mondelēz has a long-term commitment to Milka in the China market and believes that the brand will do very well.

In addition, he also mentioned the local biscuit brand Pacific and the popular international biscuit brand LU introduced from France. Vlaanderen believes that Pacific meets the demand of consumers for well-being snacks, whereas LU meets the demand of high-end consumers. He said that Oreo can also launch a line of products at the higher end.

Addressing challenges

Mondelēz International ranks No. 1 in biscuits and candy, and No. 2 in chocolate and gum globally, according to information from Euromonitor International. About 85% of the revenue of the world-famous snacks powerhouse comes from its core snacks categories. In addition, almost 3/4 of its revenue comes from markets outside of North America.

However, there's no denying that whether globally or in China there is a growing trend for healthy eating, and the snacks industry faces the challenge of a slowdown in growth.

Yet Vlaanderen is full of confidence, believing that like the two sides of a coin the other side of challenges is opportunities.

He said that Mondelēz has adopted a three-part “mindful snacking” strategy globally. The first part of the strategy is to accelerate the development of well-being snacks.

“We believe that as long as people are temperate, snacks can be part of a healthy diet,” he said.

Vlaanderen gave an example: belVita plays a very important role in Mondelēz's well-being product portfolio, so does China's Pacific biscuit. The newly launched Stride Waves also belong to the well-being snacks category. Although its taste is close to fruit candies, it is actually a sugar-free gum product.

As the second part of the strategy, Mondelēz is also striving to make its power brands healthier. For example, for Oreo, the company will use more authentic ingredients and fewer processed and artificial ingredients. Vlaanderen also disclosed that Mondelēz is developing low-sugar techniques for its biscuits.

The third part of the strategy is adopting portion control packs, which is an effective method to help control calorie intake. Vlaanderen said that Mondelēz will put this into practice in connection with its global strategy with local characteristics.

Local innovation

So what opportunities does Vlaanderen think the China market offers, and how will Mondelēz China seize these opportunities?

He said that in China, Mondelēz is focused on getting closer to consumers as the first thing to do is to show respect for the tastes of local consumers. On the one hand, when studying the tastes of consumers in the future, Mondelēz will not just do it online, but also do taste testing in one or two provinces. If the results of testing are good, it will apply the tastes on a large scale to the entire country. Mondelēz will also collaborate with e-commerce companies to analyze data in the hope of predicting new trends as people's tastes change.

So whether for its international brand Oreo or its local brand Pacific, when launching or developing new products in China, Mondelēz will look at the unique tastes of local consumers. “Next you'll see that Pacific will launch more new products in the China market that are better aligned with the tastes of local consumers,” said Vlaanderen.

Reportedly the newly launched Stride Waves has two flavors “tailor-made” exclusively for the China market, and these two flavors are also the most popular ones in China at present.

Vlaanderen also mentioned that, following its foray into China's mooncake market last year, this year the company will again offer Oreo mooncakes. “We hope that Oreo can become a part of consumers' lifestyle, as the Mid-autumn Festival is also a part of people's lives,” he said. “This is why Oreo entered China's mooncake market in the first place.”

In addition, he also said that the entire industry including gums, biscuits and chocolates is recovering. Data from Nielsen shows that the gum category has already ended the negative growth over the past one to two years, and the entire category recently recorded positive growth.

The new way to play with e-commerce

Mondelēz which places special importance on the e-commerce channel in China, believes innovations will be key to the e-commerce channel in the future? Vlaanderen shared his thoughts on this.

He pointed out that Mondelēz had a global goal to reach $1 billion in revenue through e-commerce by 2020, and e-commerce in China is one of the most important drivers for global business growth. However, e-commerce performance varies for different product categories. For example, in the baby diapers industry e-commerce has a very high percentage, but gums as an impulse consumer purchase relies more on offline stores for sales.

“So the key is how can we create opportunities to stimulate people's impulse purchases online. Once we can find such opportunities, we'll be able to unleash the potential of impulse purchase items online,” said Vlaanderen.

He also pointed out that e-commerce is not just a channel to face consumers for Mondelēz, but also a channel to develop the e-B2B business. Currently, Mondelēz is partnering with Alibaba LST and JD New Channel. Vlaanderen said that through this model Mondelēz now has covered 1.5 million stores, and the coverage will be further increased in the future.

He also said that another e-commerce market segment discovered by Mondelēz China that is growing rapidly is the O2O new retail, which means that consumers can place an order online and their order will be delivered by an offline store. This can further increase the penetration of products. Currently the growth rate of Mondelēz in this business is 70%.

“This is also a very stunning example to me as a foreigner working in China,” said Vlaanderen. “In any market of the world, whether for technology or for business, it's very hard to achieve such speed of growth as that in China.”