The products of Mondelēz International can probably be found in every grocery store and home in America. Oreo, Triscuit, Wheat Thins and many other Mondelēz products fill shopping baskets daily. The research and development team behind a powerhouse company like that, naturally, is just as vast, diverse and innovative.
“We’re focused on a balanced portfolio of innovation types - flavors and line extensions, seasonal offerings, pack size and format variations and what we term beyond-the-core innovation – as well as regular renovations of our best sellers; with the goal of exciting our customers and delighting our consumers,” says Rob Hargrove, executive vice president and chief research & development officer for Mondelēz International.
The company, which divides its products into five categories—Biscuits, Chocolate, Gum & Candy, Cheese & Grocery, and Beverages – has developed a dependable, time-tested model of product development.
11 hubs of development
Mondelēz International’s research organization, which the company calls the Research, Development and Quality (RDQ) department, is spread across a worldwide network of 10 technical centers and a science center.
This is part two of our three-part series on Mondelēz North America. You can read more about the business side Mondelēz here as well as learn more about the company's plant operations here.
A key advantage of having staff spread across that network is the ability to recruit and retain top tier scientists and other innovators from numerous countries. The system also allows the company to integrate best practices from each geographic area, Hargrove notes. The global centers are located in cities ranging from East Hanover, N.J., to Wroclaw, Poland, to Suzhou, China.
“A few of these sites conduct research into technical enablers for snacks innovation (ingredients, flavors, new processes, etc.) and some specialize in one or more of our key categories,” Hargrove says. “These sites develop and deploy all the innovation required by our 14 geographical business units.”
From an organizational chart perspective, all of the regional centers report to Global RDQ, and the RDQ department itself reports directly to the company’s CEO, Dirk Van de Put. The senior staff are organized by key product category – such as chocolate or bakery – and functional area – such as packaging, scientific & regulatory affairs, or quality, Hargrove adds.
The breadth of scientific skills in the RDQ department is vast. There are approximately 2,500 RDQ professionals in the department, primarily product and pack developers, process engineers, QA experts and consumer and research scientists.
“We also have some nutritionists, statisticians, materials scientists, data scientists as well as many other disciplines,” Hargrove says. “Product developers are mainly food scientists and process engineers by academic background.”
Mondelēz has acquired several major companies over the years. The research and development departments of those companies, naturally, play a role in Mondelēz, whether they are fully integrated or allowed to remain standalone.
Hargrove says that, as a general rule, if an acquired business is integrated quickly into Mondelēz’s business unit operating model, the acquired company’s R&D department is fully integrated into Mondelēz’s RDQ department.
On the other hand, “When businesses are left to operate more independently, we will selectively engage in critical technical areas such as food safety and provide resources and capabilities where needed,” he explains.
Product development process
Mondelēz uses the “stage gate” process to drive innovation. This process, also sometimes called a phase gate process, involves dividing product development into a series of stages separated by decision points.
Before a product moves into the next step, staff decide whether the product being developed is worthy of further effort. In Mondelēz’s case, the decision points – aka gate approvals – are considered in formal cross-functional meetings.
At Mondelēz, a “change manager” oversees the stage gate process and ensures every required element is represented. This includes product and package development, marketing, research, manufacturing, finance and engineering. Every product that reaches the end of the process has been thoroughly evaluated based on each of those functional areas.
Hargrove says new product development begins with the company’s key brands and, of course, involves consumer engagement and research to make sure a development is on target.
“We work closely with consumers to develop insights about what is required and ideas for delivering against those consumer needs. We then develop and iterate potential product and packaging solutions, define the winning initiative and commercialize it with a cross-functional team,” he says.
A simple innovation, such as a flavor change, can be accomplished in less than six months, Hargrove says. But complex programs, especially those requiring new production equipment, can take two years or longer.
Pressures of COVID, competitors
Hargrove insists that COVID did not change Mondelēz’s innovation process per se, but, like at companies around the world, the pandemic did force the company to get creative in order to get projects done.
“For example, we quickly pivoted away from central location consumer testing and converted our methods to validated in-home equivalents in a matter of weeks.” He adds that the pandemic pushed the RDQ department to experiment with faster and simpler approaches for the easier projects; these changes may become permanent.
Mondelēz competes in snacking categories that require constant innovation, as competitors are always seeking an edge with retailers and consumers. But the RDQ department is not always focused on big breakthrough products -- Hargrove says most of the innovations are small ideas that improve existing products.
For example, Oreo and Cadbury are frequently subjects of innovation in order to ensure that they are front-and-center with consumers. That kind of innovation helps maximize the decades-deep consumer love for the company’s established brands.
Often the innovations are not even specifically about ingredients, taste or texture – packaging, for example, also goes under the microscope. Hargrove reports that the current inflationary environment has driven innovation in pack sizes and formats so that consumers can find products at various price points.
Occasionally the RDQ team does create a blockbuster new innovation that can shake up a market.
“Our goal is to launch just a few, well-tested, big hitting innovations in a market each year,” Hargrove says. “We have had some great early successes over the past few years with two new types of chocolate – Dark Milk (a subtle blend of milk chocolate with smooth dark chocolate notes to interest the chocolate lover who wants the flavors of dark with the smoothness of milk) and Caramilk (a caramelized white chocolate variant).
"I’m also very encouraged by the launch of Oreo Gluten Free in the U.S. last year – it tastes just as good as the original and has had a fantastic response from consumers.”
A big trend in food overall that is being addressed by Mondelēz RDQ team members is plant-based innovation. Hargrove says the company has developments underway in that area.
“I’m watching with great interest two plant-based innovations: a test launch of Philly Plant Based spread – which I tasted in Europe a few weeks ago, and it was delicious! – and Cadbury Plant Bar, a delicious creamy chocolate that replaces milk with almond paste that just recently launched in the UK,” he says.
With a research and development team as powerful as that of Mondelēz, there is no doubt the processor will continue to be a major player in grocery. And in front of every RDQ process, naturally, is the consumer. Says Hargrove: “We are driven and guided by our consumers’ needs.”