Mondelēz ramps up presence in emerging markets with $65m R&D investment

The Cadbury and Oreo owner has unveiled plans to focus its R&D resources at nine locations across the globe – including sites in the US, Europe, India, China and South America. Three facilities are already open, with the remaining six due to come on line in the coming two years (see box-out below).

Mondelēz said the move will boost efficiency by concentrating staff and resources into better-equipped hubs.

The business currently employees more than 2,400 scientists, chemists and engineers in Research, Development & Quality (RDQ) and operates 10 research and development centers. This includes facilities in Paris, France; Munich, Germany; Whippany, US; and Melbourne, Australia that are not included in the list of the company's nine 'hub' sites.

Mondelēz told this site that it expected about 80% of its RDQ staff will work at the nine hub locations, and that it would retain a presence in "several other" locations around the world.

"Since this is a process that will take place in consultation with local employee groups over the next two years, we will not address the status of other current sites at this time," added a spokesperson.  

Staff recruitment and retention

Mondelēz has said the move will enable it to better recruit, retain and develop staff across a range of science and technical disciplines, while giving the business a stronger presence in emerging and developed markets.

"With these advantaged technical centers, we're focusing our investment in research, equipment and capabilities to drive innovation to support our growth strategy and innovation, margin and quality platforms," said Rob Hargrove, executive vice president of RDQ.

"These hubs will enable improved efficiency, effectiveness and accelerated project delivery, while the increased scale across key markets will provide rapid access to changing consumer needs and trends."

Targeting emerging markets

Mondelēz has set its sights on emerging markets, and is this month launching its Milka brand in China after tailoring products to meet local tastes.

The company has said it sees “enormous potential” for the growth of the chocolate category in China, where consumption is low even by emerging market standards

In July, Mondelēz reported 1.5% organic revenue growth in its second quarter, but grew below the combined chocolate, biscuits and gum & candy markets in the first half of 2016.

Nielsen data showed the global biscuits, chocolate, gum & candy market grew 2.8%% up to June year-to-date, but Mondelēz grew 1.9% in these combined categories over the same period.