Mondelēz Shares Safety Strategies During Health Crisis

The goals: Keep people healthy and meet increased consumer demands.

April 01, 2021

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CHICAGO—Early in the coronavirus pandemic, businesses were faced with challenges and uncertainty. Recently, Dirk Van de Put, chairman and CEO of Mondelēz International, shared how his organization responded to the unexpected emergency, reports Food Safety News, revealing how businesses can find opportunities to grow when faced with a crisis, be it a natural disaster or an invisible virus.

“If you are dealing with a food safety crisis, let’s say a Salmonella infection in a plant, you know what to look for, what to deal with, you can go to case studies, but in this case there was no playbook,” he told those at the 2021 virtual Global Food Safety Initiative Conference. “We have about 120 plants around the world, and we started to monitor our people showing up for work every day. The first one to two months, the ongoing escalation of seeing how big this was starting to affect [operations] around the world was mind-boggling.

“You had to deal with all those fronts where potentially something could go wrong, and you needed to prepare for it. As the crisis continued, it became clearer what we should be really focused on. The biggest challenge was to keep the supply chain going,” he said.

Mondelēz for years inspected its own plants regularly and visited suppliers. But with COVID-19, virtual food safety inspections replaced in-person activities.

Being prepared is important, but not knowing what exactly to expect was tricky. Mondelēz has a system of Special Situation Management Teams. There is a global team, plus one for every country around the world and in every plant. When a crisis occurs, those teams meet to determine what actions the company will take.

“We learned it is a moment where you cannot improvise too much. My style normally is letting people take their responsibility and get on with the business, and I see myself as a coach, helping them be successful,” Van de Put said. “In a time like this as a leader you need to give strong guidance on what the priorities are, what the framework of action is and what you want people to do. You need to be clear on your priorities, we didn’t know what was going to happen, so we had to take all types of measures.”

The company identified four priorities as COVID-19 hit. The first was the safety of colleagues, customers and consumers. The second was business continuity as the demand for products increased. The third was helping communities, which included about $30 million in donations.

“The last priority was about emerging stronger,” he said. “We used the opportunity to accelerate our strategy and put in place a number of things we knew would help us be a stronger company. At the end of all of it, we had a successful year, we increased our market share like never before, and everybody feels proud of how we’ve reacted to this crisis.”

To manage those priorities,  Mondelēz took three major steps.

“The first was to simplify our business; the supply chain was our main concern and getting business continuity, so we used this opportunity internally and with the retailers to reduce the number of SKUs we have in the company,” said Van de Put.

The company had already planned to reduce office space by 40%, and the pandemic accelerated that goal. Plus, management recognized the need to reduce costs.

“We wanted to make sure that the $200 million extra costs due to COVID in the business could be absorbed and we could deliver normal financial results for the year, but at the same time we wanted to invest more,” he said. “The other was acceleration—do the things we already wanted to do but do them faster. The example there is every year we want to increase investment in our brands, and we accelerated our investment even more and that helped us to come out stronger at the end of the year with the market share increase.”

Food industry leaders are responsible for the production, processing and distribution of food, because the wellbeing of every human depends on reliable access to safe, nutritious foods, he told the audience. It’s another reason why meeting these goals was so important to Mondelēz.

“The pandemic has been challenging,” Van de Put said. “Yet, much remains to be done. Today more people suffer from food insecurity than before the crisis, more people struggle to access sufficient, safe and nutritious foods and the trends are not encouraging. Unsafe food causes significant financial burden in low- and middle-income countries, generating a productivity loss of some $95 billion per year. Safe food, from tillage to table, from muddy to mouth, from boat to bowl; this requires a strong collaboration of all stakeholders, public sector, private sector and consumers.”

For more on food safety, read “Growing a Culture of Food Safety” in NACS Magazine.

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