American confectionery giant Mondelēz International has revealed plans for a new innovation hub, aimed at developing the future of snacking.
In the company’s third quarter earnings phone call on Monday, Mondelēz EVP and chief growth officer Tim Cofer said that the new hub will focus on well-being snacks, digital platforms, and premium snacks, according to Fortune.
Cofer expects the program, known as SnackFutures, to contribute $100 million to revenue by 2022.
“SnackFutures is about capitalizing on new trends, mobilizing this ecosystem of entrepreneurs and the best of internal all towards our end goal which is consumer-centric growth and to really advance our global snacking leadership,” Cofer said.
SnackFutures three-pronged approach includes invention of new products, reinvention of smaller brands with large-scale potential, and investment in outside ventures to diversify the company’s portfolio.
The snack giant reported net income rose to US$1.19 billion, or 81 cents per share, in the third quarter of 2018, from US$981 million a year earlier. Revenue fell 3.7 per cent from $6.5 million a year ago, to $6.3 billion this quarter.
Chairman and CEO Dirk Van de Put said the company “performed well” in the quarter and expects to see the effects of the long-term growth strategy into the future.
“We continue to see good momentum in emerging markets, underpinned by solid volume growth and strong execution. We are beginning to deliver against our new long-term growth strategy by implementing a more agile innovation model and establishing a new commercial structure that will improve our consumer focus and drive greater local accountability, while igniting our global and local brand and innovation agendas.”
The maker of Cadbury and Oreo implemented a cost cutting plan in 2014 in an attempt to save about $1.5 billion per year by 2018. These measures, along with higher pricing helped to drive its adjusted gross margin up according to Reuters.
However, sales in its biggest market, Europe, suffered a 3.3 per cent drop to $2.36 billion, while sales in Latin America fell 14.8 per cent to $774 million.