Mondelēz’s SnackFutures Unit: Pivoting Toward Innovation

Nearly every traditional consumer packaged goods (CPG) company is attempting to reinvent itself through some combination of external acquisitions, new partnerships, and internal innovation via “intrapreneurship.” Mondelēz International believes that it’s already come up with a winning formula.

It may not be possible to compare the progress of Mondelēz with its old corporate sibling Kraft Heinz, or with Danone, PepsiCo, General Mills, Coca-Cola, and others in terms of how they’re overhauling themselves, but Mondelēz can make what may be a unique claim: It’s already hatched six new brands from its startup platform, SnackFutures. And in the space of just a couple of years, these fresh brands already have products on store shelves and have engaged online communities.

“All of the brands are highly incremental to the Mondelēz International portfolio,” says Brigette Wolf, head of SnackFutures Innovation for Mondelēz. “We also saw the opportunity to give consumers more choices, which was a big piece for us. We looked for pain points for trying to solve people—or human—needs versus brand or asset needs. Our mission for SnackFutures is to be disruptive in snacking and push boundaries, so each brand disrupts a convention in its own right.”

Under the umbrella of a SnackFutures “manifesto” that calls for being “good for people, kind to the planet, and deliciously fun,” Mondelēz began by investing in startup Uplift Food, which produces prebiotic powders with ingredients that purport to improve moods, and Hu, a startup that concocted a line of paleo and vegan chocolate bars.

Last year, SnackFutures incubated and unleashed four of its own new, internally developed brands: Dirt Kitchen, which makes fruit and vegetable snacks from excess or unappealing-looking produce; CaPao, which uses the parts of cacao fruit that might otherwise be wasted to make snacks and a ready-to-drink beverage; NoCOé, a carbon-neutral aperitif brand that Mondelēz developed in Paris; and Ruckus & Co., a line of   frozen smoothies for school lunchboxes.

Besides creative and promising product and brand ideas, the SnackFutures methodology involves fast development and retail deployment on just a few stores’ shelves, an approach that dramatically shortens the CPG industry’s typical cycle and gives consumers early opportunities to react to a new product proposition rather than wait until an idea has been focus-grouped to death.

“You set up for smaller experiments rather than a major launch,” Wolf explains. “You’re managing risks along the way. You’re taking more risks, but you’re not betting the house. You get a batch of 100 or 1,000 and move up the [scale] chain—versus, traditionally, waiting until everything is perfected and then you do a massive launch. When you’ve done that, it’s hard to turn and pivot and adjust.”

Among early signals that excited Wolf was the fact that in March a woman bought five bags of Dirt Kitchen vegetables at a store in the brand’s Los Angeles test market; that told her shoppers actually could get enthusiastic about the products as well as the concept. At the same time, Dirt Kitchen recently cut the size of its suggested purchase on Amazon to just a six-count for about $12, from a 12-count for about $24. “It was too high a price point,” Wolf says, “so we quickly adjusted.”

In gaining consumers’ embrace of these new brands, one lesson SnackFutures doesn’t have to relearn is the primacy of taste. “There are a lot of consumer needs, and so many players have a great idea for solving them,” Wolf says.

But if a product doesn’t taste great and doesn’t get repeat sales, it’s problematic. “For us, it’s critical to have repeat,” she emphasizes. “And at Mondelēz, we have the expertise in what food needs to taste like for that great experience that brings people back.”

SnackFutures’ goal is to raise $100 million in revenue by 2022 by leveraging the potential of brands that capitalize on and help build new trends. It will supplement other corporate efforts, such as Mondelēz’s recent acquisition of Perfect Snacks, a maker of nut butter–based protein bars and bites, and its earlier purchase of Enjoy Life Foods, a “free-from” food pioneer, and Tate’s Bake Shop, which makes premium cookies.