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: “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 at the peak of cost-cutting when Kraft Heinz underwent ruthless cost-cutting under the ownership of private equity firm 3G Capital. After taking over H.J. Heinz in 2013, 3G cut thousands of workers and factories to create leading profit margins in less than two years.
“It was all about efficiency and cost-cutting and profit and 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.”
When cost-cutting, it is easy to forget about consumers, which is why we are there in the first place.
Debora Koyama, Mondelēz
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. Earlier this 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, Koyama faced backlash. “Loop was one example where many people were unsure because people are new to change. Some didn’t want the project at all. They said ‘why are you trying to do this? It is totally off of the supply chain process that we have’,” 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 the moments I have done things I am not very proud of [in my career] were moments 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.