“Snackification” and the experience economy drive Mondelēz’s latest food forays

26 Aug 2024 --- Global snacking sales are burgeoning, with projections of continual growth for the next three years. Another promising category is beverages, where younger consumer cohorts drive many innovation trends such as “snackification” with their increasingly fluid lifestyles, according to Mondelēz’s global licensing lead Christopher Callanan.

Food Ingredients First sits down with Callanan to dive into Mondelēz’s strides in the snacking and beverage sectors, particularly its partnership with Arla Foods to bring Milka chocolate milk to key European markets and strong consumer calls to limit the use of sugar in confectionery.

“Across the globe, we’re seeing several trends emerge fairly consistently,” he reveals. “An expansion of the middle class, younger consumer groups that are increasing their power and reach, particularly through social media and urbanization have resulted in a trend we refer to as ‘snackification.’”

“So, there is a growth of convenience, a growth of on-the-go, but also in-home, snacking taking over more from traditional meals.”

The experience economy

With the COVID-19 pandemic changing how consumers engage with food and drink, Callanan notes there is a “big resurgence in the experience economy,” where individuals are more interested in a brand’s stories, novelty and how “special” even small things can feel.

“These are important to consumers more than ever, and they apply to confectionery in snacking categories more than ever.”

Such consumer choices have also influenced Mondelēz’s partnership with Arla Foods to produce, distribute and market chocolate milk under the Milka brand in Germany, Austria and Poland.

“People want little treats. They want brief moments of joy and indulgence in a convenient format. Milka is a beloved brand in the three markets, so it makes sense for us to provide Milka’s indulgence and unique loved characteristics in the chiller as well.”

Sustainability and other success metrics

For Milka, Calanan says it made sense to partner with a company that could bring the products to life for shoppers with marketing credentials and selling capabilities.

As chocolate remains the dominant flavor in milk trends, Callanan says sustainability is crucial to this product.“In terms of what ‘winning’ means, one of the things that matters to us when we enter a new category is our market share. So we’re working with Arla to deliver revenue, but more importantly, the category’s market share.”

As chocolate remains the dominant flavor in milk trends, Callanan says sustainability is crucial to this product, especially in the cocoa supply chain. Mondelez’s Cocoa Life initiative, a US$1 billion investment, aims to make cocoa sourcing more sustainable in key cocoa-producing countries.

“It’s about achieving sustainable and deforestation-free cocoa, a vital crop and in a way that benefits not just the environment, but also the farmers who grow it. By 2025, 100% of all Milka will be made with beans sourced from the Cocoa Life program, applicable to the Milka chocolate milk as much as it would apply to a chocolate bar.”

The chocolate milk will be packaged in recycled PET bottles, part of the German deposit return scheme.

Sugar reduction in confectionery

In addition to sustainability, younger consumers progressively opt for healthier options, especially for snacking. Sugar-reduced products are piquing the interest of health-conscious consumers. “Consumers are telling us that they value the ability to make informed choices.”

However, for Mondelez, which discontinued its sugar-reduced Cadbury Dairy Milk last year, consumers know chocolate comes with sugar.

“They know chocolate is an indulgence and say that’s okay. What matters to them is understanding how much sugar and that comes back to clear labeling and transparency. The snackification trend means that consumers make more choices every day than 50 years ago. So what matters is that they make those choices in an informed manner.”

“On the product side, we know that Arla Foods’ added sugar standards are tight. That’s another reason we’re happy to partner with them,” Callanan concludes.

By Anvisha Manral