Mondelēz poised to take a big slice of the Chinese sweet snack market
The Oreo maker officially launched two Oreo frozen cheesecakes at the China International Import Expo (CIIE), held in Shanghai in November 2022, following the installation of a cake production line at its Beijing plant. The cakes were developed in partnership with Fonterra, a New Zealand dairy giant.
Mondelēz has also finalised its five-year 350 million yuan ($50.9 million) investment in a facility in Suzhou, East China's Jiangsu province. The R&D centre not only provides innovation services for the country, but also regions like Japan, Australia, the Middle East and Africa. Mondelēz operates in more than 160 countries and regions worldwide, boasting around 80,000 employees.
The Suzhou centre joined the World Economic Forum’s Global Lighthouse Network – a platform to develop and scale innovators via cross collaboration – and became the world's first lighthouse factory in the global biscuit and snack industry in January.
Driving China’s economic growth
This is all part of China’s plan to encourage multinationals to play a bigger role in boosting its economic growth. In fact, the country's snacks space has entered the fast lane of development, driven by its boom of internet, logistics and cold chain tech.
According to the China National Food Industry Association, the sector experienced a 12% CAGR between 2013 and 2018. In 2021, consumer demand for snacks brought in over 800 billion yuan in annual sales. The sector is projected to double in scale and cross the 1 trillion yuan mark by 2025, so it’s little wonder it has lured giants of the industry from various countries.
“With China entering a new era of green and innovation-led growth, it will continue to open up for foreign investments and provide a more favourable business environment,” said Joost Vlaanderen, president of Mondelēz Great China.
He added the Oreo maker is planning to entrench its well-known biscuit and cake brands into this lucrative market in the years ahead.
“In a market as competitive as China, you need to deeply understand what consumers want,” added Vlaanderen.
“That's why in Suzhou, we have a world-famous research and design centre where we develop and design products. We make our products here so that we can deliver to consumers what they want at the speed of China.”
The Global Lighthouse Network was formed in 2018 by the World Economic Forum in collaboration with McKinsey & Company. Currently, the membership numbers over 130 plants owned by various companies,
It is a community of manufacturers applying advanced technologies to speed up and spread the smart adoption of Fourth Industrial Revolution tech throughout their supply chain, such as artificial intelligence (AI), robotics, the Internet of Things, Web3, blockchain, 3D printing, genetic engineering and quantum computing, among others.
Mondelēz has also pledged to invest more in digital solutions to transform into an integrated supply ecosystem. This, it claimed, will improve on-time in-full delivery (a supply chain metric for measuring performance in the logistics industry) by 18% and cut 32% in lead time.
Vlaanderen added China's optimised COVID-19 response and further opening-up measures have delivered positive signals to the global business community.
He added the Ritz, Tuc, belVita and Lu brand owner is optimistic about the snack industry's outlook in 2023 and beyond.