Strategy

Mondelez Unveils New Plan for U.S. Growth

After being rebuffed by Hershey, the confectioner is targeting U.S. consumers with an Oreo branded chocolate bar.
Matthew HellerSeptember 7, 2016

A week after scrapping its bid to acquire Hershey, Mondelez International is now planning to generate U.S. growth through its own products, including an Oreo branded chocolate bar.

The world’s second-largest confectionery company said Wednesday it would launch Oreo bars made with its Milka chocolate in the U.S., initially on a limited basis beginning in the fourth quarter with a full product launch planned for early next year.

Also heading for U.S. chocolate lovers are new varieties of Mondelez premium chocolate bars under its Green & Black’s brand.

“With our strong brands and global expertise in chocolate, we see enormous potential to grow our U.S. business and expand the category,” Tim Cofer, Mondelez’ chief growth officer, said in a news release.

Mondelez is only the eighth largest confectioner in the U.S. with about $326 million in sales. Cofer noted that while the U.S. is the world’s largest chocolate market, valued at $14 billion, per capita consumption is only about half that of many developed European chocolate markets.

The $23 billion merger with Hershey would have created the world’s largest confectioner, giving Mondelez access to such iconic products as Hershey’s Kisses and Reese’s Peanut Butter Cups. But after Hershey rejected the offer, Mondelez announced Aug. 29 it had ended merger talks.

As part of its new strategy, the company is turning to what it called the “unique cross-category innovation” of pairing Oreo with Milka. The product is already available in more than 20 countries and is aimed at the mainstream segment of the U.S. chocolate market.

The new Green & Blacks range is targeted at the premium segment, with 17 varieties scheduled to hit U.S. shelves by the end of the year, followed by an additional 20 next year in advance of Valentine’s Day.

Mondelez also said Wednesday it was expanding its e-commerce snacks business with the aim of generating at least $1 billion in revenue by 2020. In trading Wednesday, the company’s shares fell 1.8% to $43.60.