Food Business News - February 24, 2015 - (Page 13)

changing consumer preferences offers, Mr. Harmening said. "Starting this summer, we are taking the biggest franchise in the cereal category, cereal varieties that represent 11% of category sales, glutenfree," he said. "We shared this news with our customers last month, and they are very excited. It will drive interest in the Cheerios brand and to the entire category. This is a first step in broad investment plan designed to renovate our basic portfolio for today's wellness oriented consumer." Pressed by an analyst during questions and answers over whether the shift in consumer preferences will require costlier ingredients and reduced gross margins, the General Mills executives said the changes do not dim the company's financial prospects. Mr. Powell said the company's past experience doesn't suggest the changes will hurt profitability. He called the move to glutenfree "an investment, part of a continuous process." "Ten years ago we reformulated all of our cereals so they had whole grains as the No. 1 ingredient," he said. "That was generally a margin neutral for the company and very meaningful for consumers. These are the kinds of things you do, particularly when you do them in the context of our goal of maintaining or increasing margins." Similarly, Mr. Harmening noted a move to gluten-free for certain Chex brand products arrested a long-term downward trend in sales for the brand and launched an extended period of double digit growth. Donal L. Mulligan, executive vice-president and chief financial officer, said gross margins comparisons may not be apt between better-for-you foods and conventional products. He noted that while gross margins "are leaner" for some natural products, advertising spending tends to be lower and net margins are competitive. FBN Mondelez has big plans to grow small platforms BOCA RATON, FLA. - Innovation platforms that, from modest beginnings, generate hundreds of millions of dollars in sales are at the heart of growth strategies at Mondelez International, Inc., said Irene Rosenfeld, chairman and chief executive officer. In a Feb. 17 presentation, Ms. Rosenfeld described past, current and what she expects will be future success following this template. She spoke at the 2015 annual conference of the Consumer Analyst Group of New York at the Boca Raton Resort and Club in Boca Raton. Even with long-established powerhouse brands generating annual sales of $34 billion, new products account for a significant part of the company's business, Ms. Rosenfeld said. "Over the last few years, innovation has accounted for about 13% of our revenue," she said. "That includes platforms such as belVita biscuits and Bubbly chocolate bars. belVita has been one of our most successful global innovation platforms in the last five years. We've taken belVita from a small, LU biscuit brand in France at the time of acquisition and transformed it into February 24, 2015 a global platform that leverages the benefits of proprietary technology to sustain energy throughout the morning. We launched belVita in the U.K. in 2011 and created a new mainstream biscuit occasion at breakfast. We then introduced it in other European markets and in North America in 2012, where it's grown into nearly a $200 million business. Today belVita is sold in 54 countries and generates $650 million in revenue. It's grown about 35% (annually) since 2011." Bubbly is the aerated chocolate platform at Mondelez. Available in more than 50 countries, Ms. Rosenfeld called it "another success story," generating sales without simply cannibalizing existing chocolate business. "Nearly everywhere Bubbly is sold, it delivers incremental sales by driving both category expansion and growth of our core chocolate products," she said. "Bubbly is a prime example of how we leverage one product format and offer it successfully under a variety of iconic brand names. Today Bubbly is a $200 million platform, sold under Cadbury Dairy in the U.K., Milka in Germany, Lacta In Brazil, and Alpen Gold Russia." Newer in the company's new product pipeline is Marvelous Creations, an innovation platform Ms. Rosenfeld said Mondelez is now in the process of taking global. "The concept is simple - a tasty mix up of chocolate with bits of candy," she said. "We initially launched Marvelous Creations in 2012, under Cadbury Dairy Milk in Australia. We were generating about $40 million in sales. Just like Bubbly, Marvelous Creations proved to be highly incremental, so in 2013 we launched it in the U.K. under Cadbury Dairy Milk and in Germany under Milka. Last year we introduced it in Canada and Russia. So far this year, we've launched it in South Africa and Egypt. We expect to roll out Marvelous Creations in other countries in the coming years and anticipate it will become a $500 million platform for us by 2018." Ms. Rosenfeld said Mondelez earlier this year implemented a consistent categoryled model in all of its regions. "Now that it's in place, we'll be able to move even faster in bringing proven ideas to market," she said. "Specifically, the operating model will improve our ability to rapidly adopt best practices across regions, to accelerate growth of our power brands and innovation platforms, and simplify and standardize processes to Irene Rosenfeld, chairman and chief executive officer, Mondelez International, Inc. FOODBUSINESS NEWS ® 13

Table of Contents for the Digital Edition of Food Business News - February 24, 2015

Food Business News - February 24, 2015
General Mills accepts the C.P.G. challenge
Gluten-free front and center
Mexican trade rift looms over Sweetener Colloquium
Table of Contents
Web Contents
Editorial - Subscription models may offer unique marketing opportunities
Confectionery companies switching to simpler ingredients
McCormick to acquire Italian spices and seasonings company
Mondelez has big plans to grow small platforms
WhiteWave Foods ‘busting at the seams'
More c-suite change at Kraft Foods
Keurig in transition
Mondelez acquires Enjoy Life Foods
Innovation paying for PepsiCo
TreeHouse Foods trims expectations
Kraft cleans up Capri Sun
Washington - Federal bills seek to mandate G.M.O. food labeling
Company Profile - Dr Pepper Snapple Group seizing opportunities
Capitalizing on R.C.I.
Ingredient Innovations - Clean label starches get tougher
Are clean labels and G.M.O. ingredients compatible?
More clean label ingredient opportunities
Dairy Business News - Yogurt, the next generation
New Food Products
Ingredient Market Trends - Belt-tightening time for U.S. agriculture in 2015-16
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - February 24, 2015