Mondelez Bakes More Technology Into the Snack Food Industry

Mondelez seeks to use technology and smart marketing to keep its old products important to a younger audience.

Apr 2, 2014 at 6:02AM

In 2012, Kraft Foods (NASDAQ:KRFT) split off its confectionery and global development products and operations, such as the Oreo and Bimbo brands, into Mondelez International (NASDAQ:MDLZ). Mondelez has not built up the household recognition that Kraft has, but leaders in the company seek to change that through innovating marketing and technology ideas.

Mondelez becomes an angel investor
Setting aside time for employees to work on their own new ideas which might not lead to business development has had great results for companies like Google (NASDAQ:GOOGL), which claims that Gmail and Adsense were both initially created during "20% time," the time when employees are allowed to freely innovate with their own ideas.

Mondelez is trying a similar idea with its "Mobile Futures" initiative, which pairs brand executives with a venture-development firm in the hope of bolstering an entrepreneurial attitude within the snack company. The ventures get seed funding from Mondelez with the hope that they will team up to market Mondelez brands, although ultimately the programs will run as stand-alone start-ups. The snack company will then assign some of these groups to work with brand executives, on company time, as a way to bolster entrepreneurial spirit within itself.

Mondelez Prankstr App

Photo: Adage

The initiative gives employees the chance to work on fresh ideas that may uncover some gold nuggets in products and marketing that will help propel the company forward. For example, Prankstr, a digital tool that allows users to pull elaborate pranks on social media, has already received funding and the brand manager of the Sour Patch Kids product is helping with work on the project. The tool, now housed at beta.prankstr.me, allows users to select from one of seven prank options, create custom content, and then record and share reactions from friends on social media.

What does any of this have to do with Mondelez? Maybe nothing, or maybe an advertising push. Mondelez's created its own "Shower Patch Kids" body wash prank to show its commitment to staying fun.

The Sour Patch body wash prank:

At the same time, Mondelez executives have been learning how to move faster and become more entrepreneurial, since the start-ups live independently from the company's brands. Mondelez launched Prankstr within 90 days of its conception, with help from the Sour Patch Kids brand executive.

Betabox, a funded idea with a more traditional marketing scope, positions product sampling by pairing the company's brands with brands not made by Mondelez, as well as other e-commerce partners. Betabox seeks to develop a more efficient sampling program in which instead of handing out products at grocery stores to random shoppers, companies can target individual consumers or groups by using lists of items they already purchase. Sour Patch Kids products have started appearing in shipments of clothing purchased through other companies, for example. 

Sour Patch Betabox Via Adage
Mondelez funded Betabox. Photo: Adage


Increased engagement through social media, beyond posts and tweets
While every modern company is investing in some sort of social media marketing push, Mondelez hopes to take this a step further. As part of a new deal which has been described as a "global strategic partnership," Mondelez will use Facebook (NASDAQ:FB) to go "beyond a traditional media buy" with "a joint commitment to innovation, opportunities to opt into Facebook's beta-testing programs, access to research and capability-building through immersion days in priority markets" and more throughout 52 countries which will include the United States.

Orea Facebook Page

Bonin Bough, Mondelez's VP of global media and consumer engagement, said in a statement:

Our recent campaigns with brands like Cadbury Creme Egg, Milka and Nilla Wafers demonstrated that Facebook can drive business growth, and this made us rethink our media approach... For the first time, we'll be able to incorporate Facebook at the core of our media investment plans. This isn't just about having a social-media strategy; it's about digitizing our entire approach to communications.

Facebook can be more than just a platform for companies to blast advertisements at consumers. Carolyn Everson, Facebook's VP of global marketing solutions, said:

As an industry, we're shifting back to a more personal way of marketing, leveraging technology to bring a personal touch to business with the scale and efficiency of mass media... Every day, people spend more of their time on mobile and on Facebook, which is built around people and the things they care about. We're excited to team up with Mondelez International to make marketing personal again.

It will be excited to see what this means as Mondelez reveals its Facebook integration in the future.

While the marketing push centers on Facebook, Mondelez has incorporated other social ideas as well which include a Twitter-oriented "Oreo Trending Vending Machine" that the company showcased at the South by Southwest festival, or SXSW, a conference geared toward new, exciting consumer technology. With the machine, customers can create custom Oreo cookies by selecting from "trending flavors" displayed on a touch screen panel and watch the machine create their custom cookies. One part 3-D printer, one part social media outlet, and one part fun like an old-time gumball machine, the company hopes that fun innovations like this will keep the company fresh in the eyes of consumers.

Foolish Takeaway: Technology shouldn't be wasted on tech companies
When a consumer uses 3-D printing technology to make a custom Oreo cookie, investors should consider how new technology constantly changes the game for even traditional, low-tech companies. As an investor in consumer goods, I focus on companies that can take bland, low-tech products and incorporate smart ideas into them to keep their businesses continually fresh. I am long on Mondelez and its tech future.

3D printing Oreos, a bearish sign for cookie lovers and smart investors
For the first time since the early days of this country, we're in a position to dominate the global manufacturing landscape thanks to a single, revolutionary technology: 3D printing. Although this sounds like something out of a science fiction novel, the success of 3D printing is already a foregone conclusion to many manufacturers around the world. The trick now is to identify the companies -- and thereby the stocks -- that will prevail in the battle for market share. To see the three companies that are currently positioned to do so, simply download our invaluable free report on the topic by clicking here now.

Bradley Seth McNew owns shares of Kraft Foods and Mondelez International. The Motley Fool recommends Facebook, Google, and Twitter. The Motley Fool owns shares of Facebook and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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