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July 14, 2020

Mondelez plans cull of SKUs amid volatile Covid-19 demand

The Cadbury and Oreo owner is planning to significantly cut the number of SKUs in its range as part of moves to adapt to trading amid Covid-19.

By Dean Best

Mondelez International is lining up plans to cut around a quarter of its SKUs as part of moves to adapt to the volatility Covid-19 has brought to trading.

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The Cadbury and Oreo owner is looking to streamline production amid the pandemic, chairman and CEO Dirk Van de Put said.

“That’s always a discussion in a company like ours, that we have too many flavors, too many sizes and so on,” Van De Put said in an interview on Bloomberg Television. “This is the moment to drive that.”

The US snacks giant, also home to Tuc crackers and Milka chocolate, confirmed to just-food the target, which covers the company’s global operations, is for “broadly a quarter” of its SKUs.

“We are making adjustments to in order to maintain business continuity and customer service, as well as to prepare to emerge stronger,” Mondelez said.

The comments built on those Van de Put made in April when, during a discussion of Mondelez’s first-quarter financial results, he said the company, in the early weeks of the impact of Covid-19, had started to look concentrate on specific products.

“Our supply chain has been resilient, and we’ve delivered consistent service to our customers. Case-fill rates, in fact, are at better-than-average levels. We’ve seen an increase in demand in developed markets, and we’ve met it by focusing on the most important SKUs,” Van de Put told analysts at the time.

He also said Mondelez would look to adapt to the prospect of recession by lowering the number of SKUs in its range, without specifying a number or target. “We are reducing our portfolio in the number of SKUs and also the number of innovation initiatives,” Van de Put explained.

Related Companies

Free Whitepaper
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What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

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