US: Mondelez reveals cost-reduction progress | Progresiv
Mondelez International has revealed details of its aggressive cost-reduction programs and outlined how the company is increasing investments to accelerate revenue growth. 
Speaking at the Barclays Global Consumer Staple conference, Brian Gladden, executive vice president and CFO of Mondelez provided an update on the company's journey to reinvent its global supply chain, which is now delivering world-class productivity of more than 3 per cent of cost of goods sold. In addition, Gladden highlighted the company's efforts to reconfigure its manufacturing network. Since 2012, Mondelez International has closed, sold or streamlined 78 production facilities, and completed or announced the construction of 14 greenfield or brownfield sites, with 40 new state-of-the-art manufacturing lines expected to be on-stream by year-end 2015.
The company is also building a global shared services capability to simplify and standardize over 150 back-office processes over the next two to three years. For each of these processes, on average, the company expects to deliver cost savings of approximately 50 per cent. As a result, the company expects to reduce overheads as a percent of revenue by at least 250 basis points between 2013 and 2016.
Mark Clouse, executive vice president and chief growth officer, outlined the company's growth plan, which centers on two strategies: accelerating base business growth and filling in key consumer spaces. Cost savings will fuel this plan, and it will be governed by the same operational discipline that the company has applied to its cost agenda.
In terms of accelerating base business growth, the company is reinvesting cost savings into additional advertising and consumer support, while also shifting spending to digital and social channels. In addition, the company will expand packaging formats to increase accessibility to new households and new channels, as well as enter white spaces with proven innovation platforms. In parallel, the company is addressing three global consumer trends that are creating additional growth opportunities: an increasing emphasis on well-being, time compression and shifts in income distribution.
E-commerce is another key focus area, addressing the intersection between time compression and technology in snacks. Through a dedicated team, the company is optimizing existing e-commerce platforms by converting every consumer connection into a purchase opportunity as well as building the next-generation portfolio to take advantage of those incremental growth opportunities.
"We estimate that e-commerce could become one of the fastest-growing platforms within our company, increasing from less than 100 million dollars in revenue today to as much as 1 billion dollars by 2020," said Clouse. (www.esmmagazine.com)
