Mondelez eyes niche brands for US chocolate growth

Mondelez eyes niche brands for US chocolate growth

NEW YORK — The lack of a US anchor brand hurt Mondelez International Inc.’s chocolate expansion efforts in the United States, said Dirk Van de Put, chairman and chief executive officer of the Chicago-based company.

“We tried Milka and then tried Oreo,” Mr. Van de Put told participants during a June 1 presentation at the Sanford C. Bernstein Strategic Decisions Conference.

Mondelez extended the Oreo cookie brand into the chocolate aisle in November 2016 with the US debut of Milka Oreo chocolate candy bars. The bars are available in several varieties, featuring bits of Oreo cookies and vanilla creme along with Milka’s European chocolate candy.

“Chocolate on Oreo is a bit strange,” Mr. Van de Put said. “We needed to make kind of an Oreo-covered chocolate in a way, which is not real chocolate for the consumer. And so it was limited volume. And it was very difficult to understand ‘Where do we go from there? So, you had limited shelf space with a proposition next to what’s in the market was a little bit vaguer and no real route to expansion. That’s really the reason why we gave up on chocolate.”

But with Mondelez recently announcing that it expects to generate 90% of revenue through the two core categories of chocolate and biscuits, the former remains a vital part of the company’s playbook, and one that Mr. Van de Put expects Mondelez to find success in.

“I think we will do niche plays like our Hu chocolate, which is a vegan chocolate, is doing very well, growing very rapidly,” he said. “It’s very small. It’s a niche play, but give it 10 years, and this could be the vegan chocolate brand in US. So that’s more how we are going to play it. Can we get into premium in a significant way? Can we get into vegan and organic in a significant way? Maybe here and there, can we start to do a little bit more with our European brands also playing it more as a niche. That’s more the strategy that we will follow with chocolate in the US.”