Andriy Samusenko, CEO of Mondelēz Ukraine, in conversation with LDaily described the features of this year’s market as well as successes and obstacles in the development of the confectionery industry. After all, this year was marked by a large-scale outbreak of coronavirus, which directly affected this area: on the one hand, despite any crisis, the food sector is always in the category of basic necessity and equally in demand in society, but on the other hand, it is called upon to meet the strictest technological, sanitary and safety requirements, as to no other industry.
LDaily: What kind of challenges do you see for Mondelēz Ukraine today?
A. Samusenko: Today, yesterday and, I think, tomorrow, our biggest challenge is to achieve a stable market situation. “Stable” means predictable, and, of course, the one that envisages growth. If markets rise, if the welfare of all citizens improves, then the economy will grow. However, when an unpredictable situation occurs — for example, in 2008 or 2014 — it becomes a major challenge for large international companies. Nevertheless, at Mondelez Ukraine we easily adapt to change. We are always ready for changes and never forget the previous experience. We always draw conclusions, and if we see that we have been able to optimize something within the past crises, we use the experience gained in our future activities. In our approach to the work, we are guided by the principle of flexible thinking and trying to do more with the best efficiency.
One of the vivid examples is the situation with COVID-19, when lockdown was announced, and the situation began to develop very rapidly and unpredictably. In fact, only in a few days our team managed to relocate all office activities to work from home, and at the same time, we did not feel any inconvenience, and our business productivity was not affected at all. Quarantine continues, but it has already become such a common phenomenon for all of us! And I am more than 100% sure: if we decide to return to the office tomorrow, we will it do it just as well in a few days, without any losses, and without any negative impact on business processes.
So, the biggest challenge is attaining stability on the market. Applying our flexible approach, we fight for success with the whole team, promote our favorite brands we invest a lot of efforts in. We sincerely hope that the consumer will choose our products, regardless of whether the market will grow, fall, or remain unchanged. We believe in the strength of our brands, in the power and professionalism of our team, and this is the best answer to all challenges.
LDaily: How did sales change during the strict lockdown, did they decrease or increase?
A. Samusenko: During the lockdown, the dynamics of sales in the industry, of course, changed, and such change is different depending on the category. For some, sales doubled, and for others, they dropped. If we talk about the categories where we are present (confectionery, cookies, chips, chewing gum and candies), then April was especially noticeable within the lockdown period. For biscuits and confectionery, the growth rate greatly decreased. However, among all product categories, sales of chewing gum and candy dropped the most significantly.
Nonetheless, thanks to the strength of our team and the love of consumers for our brands, even this year the sales growth rate remains higher than the market rate, so we are increasing our share and growing compared to last year. Also, we did not review our annual business growth target and are moving confidently towards it.
LDaily: In which countries are Mondelēz products, made in Ukraine, present? Have you tried to enter other markets this year, or the coronavirus has affected your plans?
A. Samusenko: Mondelēz Ukraine products are represented on four continents in over 50 countries. In recent years, we have significantly increased our export capacity and used the moment of accession and change of regional approach. During 2014-2015, the company carried out significant work on the certification of our products: now we have all the necessary certificates of conformity, including, for example, kosher and halal products. This reputation allowed us to access many European markets.
Our factories, located in Trostyanets and Vyshhorod, are among the most efficient companies in the global Mondelēz family. We export products to the European Union and have already shown that both our factories and product quality can easily compete on the global market.
COVID-19 did not interfere with the export of our products, because even with the strict quarantine restrictions, all our logistics worked continuously, and supply chains operated in normal mode. Recently Mondelēz Ukraine products also appeared in Scandinavia and Greece. Therefore, we are moving according to our plans, and the coronavirus has affected the organization of office work rather than business processes or results.
LDaily: How much have you invested to work in the new pandemic environment?
A. Samusenko: We all see that the pandemic has not ended yet, and over the last few weeks the situation is becoming more and more intense. So, it is too early and difficult to calculate the total amount.
Nevertheless, I can say that from the very beginning of the quarantine we were guided by a balanced approach to the company’s investments – we primarily invested in the safety of employees. It was rather a solution to an urgent problem: it appeared, and we had to do something with it — for example, immediately to buy masks, despite the fact that the masks were not on the market at all, to provide all employees with hygienic products, to organize remote work, etc. We did everything that was necessary in such conditions. Definitely, at the end of the year and when the pandemic finally ends, we will take stock and calculate the cost of our investment in employee and consumer safety.
LDaily: How is the snack market in Ukraine and the world changing from year to year? Can you predict what snacks will be in demand in five or six years?
A. Samusenko: As a company that creates the future of snacking, Mondelēz is constantly studying consumer preferences and global trends. Last year, we released the first State of Snacking report, which explores how people feel about snacks and how, in general, the future of food and snacks is changing. Indeed, our pace of life is constantly speeding up, consumers have less time for their personal life and household chores. According to the survey, 80% of consumers appreciate the convenience of packing and quality. Convenience and quality — these are the main criteria for the selection of snacks and the first direction of our business in this product category.
The second direction follows from the fact, that more and more consumers are choosing healthy food and, consequently, seeking balanced snacks. People want to control their feelings of hunger, and snacks are small bites between main meals that help them do so. Therefore, there is no doubt that with the acceleration of our already rapid life, the popularity of snack categories will grow. Among those, the popularity of confectionery goods, especially biscuits will increase as well.
Speaking in a time perspective, for example, in the next five years, I don’t think that future snacks will have any significant differences from current products. They will not be as strikingly different as, for example, a push-button phone and a smartphone. Snacks will be similar to the current ones, but definitely healthier. Also, of course, they will become more convenient for the consumer and more diverse in terms of range.
LDaily: How does the confectionery market fashion affects a healthy lifestyle?
A. Samusenko: Fashion for a healthy lifestyle, of course, affects the confectionery market, but for different countries, regions, and even different consumers, this impact is different. Yes, if analyze the situation in developed countries and in Ukraine, the trends in snacking are different. I have recently read the research that shows that staying fit is not so much about regular sports, but about a very ordinary and simple exercise! According to the study, only 30% of women and more than 40% of men support their fitness. It means that, unfortunately, less than half of the population cares about their physical health. This attitude, of course, affects eating habits.
As a global company, we monitor such trends and act proactively by offering new solutions. In particular, we are talking about portion control, therefore, we have developed specific projects to reduce calorie serving for a snack. After all, the pleasure of small and large chocolate remains almost the same, but the number of calories is significantly different.
We are also working on the issue of portion control by constantly improving the quality of ingredients. We are confidently moving in this direction and trying to be proactive, fully prepared until this trend in Ukraine becomes as important and widespread as in advanced countries.
LDaily: How are you represented in the healthy eating segment? What is your current share of sales on this market?
A. Samusenko: Healthy eating — I will make a brief remark — is not only about healthy food but also about consuming the amount of food that your body needs at the right time. After all, eating too much of even the healthiest food can be harmful to human health. Therefore, we focus directly on product quality, ingredients, and portion control. We try to meet the needs of the consumer as well as at the same time inform them about the full composition of the product and the number of calories in the portion by providing comprehensive information on the package.
However, it is quite difficult to answer the question, what healthy food is or what share it accounts for in our business? For example, if we are talking about the category of chewing gum, it is not essentially a product that is eaten. It is a product that a person satisfies their own need with – from the desire to freshen the breath to functional or taste ones. That is why, it is quite difficult to clearly define the share of healthy products in our product range.
LDaily: Have you thought about launching your online store? Eventually, you have a very large number of products in the stock.
A. Samusenko: Of course, we considered launching an online store because we understand its relevance. However, we have been thinking more about the general concept of the e-commerce market because this is an obvious trend. E-commerce is growing at a frantic pace around the world. As for a specialized online store, we do not have it yet. However, in the online sales sector, we actively cooperate with all retailers and successfully promote our products. In Mondelēz Ukraine we have experts in selling goods online, we believe in this trend and develop it.
LDaily: What investments are planned for the near future? Have you had to reconsider plans because of the corona crisis?
A. Samusenko: As I have already mentioned, we are guided primarily by the needs of the market and consumers, and they are quite dynamic and changeable. Consequently, we have a long-term strategy that is designed to meet consumer demand on the market.
For 25 years in Ukraine we have invested in development over $200 million. However, these investments are long-term ones, that is, if we see the growth in demand in a category and understand that we cannot meet it in a year, two, three, or see the opportunity to create a new market segment, we clearly invest in increasing production capacity. Investment is not an end in itself for us.
Another important aspect for the company is investing in team development. It’s exactly that makes it possible to successfully advance on a competitive market. For us, it is also a corporate university, within which we have launched many employee development programs, coaching, and various training.
We did not suspend any of these projects during the pandemic, so we can conclude that the corona crisis has not affected our investments.
LDaily: And finally. What kind of social initiatives do you support?
A. Samusenko: Mondelēz is a socially responsible company. And our employees are the greatest value for us. Those who work in international companies may already be accustomed to such constant care, and eventually do not even notice it. However, this year was a good opportunity to see the particularly caring attitude towards the company’s employees. During the quarantine period, we established remote work and, if possible, transferred employees to work from home. Besides, at all factories the production process was organized in the way so that to keep the social distance between employees, we introduced enhanced disinfection, provided personal protective equipment – that is everything needed to secure our employees.
In addition, we have implemented a number of external projects. For 3 years we have been carrying out the Healthy Schools program, with more than 250,000 schoolchildren across Ukraine having participated in it. This program is aimed at the promotion of healthy eating habits, healthy lifestyle among students, and healthy space for the development of children at schools.
We cooperate with FoodBank on a permanent basis. Yet, in 2019, in cooperation with the Foodbank Charitable Foundation, Mondelēz Ukraine donated charitable products valued at about UAH 7.5 million. Those products were distributed between charities and community organizations to help socially vulnerable groups of people.
I cannot fail to mention the goals of sustainable development until 2025, which we as part of a powerful global company are fulfilling. One of them is to transfer all products to packaging with the possibility of recycling. Globally, Mondelēz has launched the Cocoa Life program supporting farmers, cocoa bean growers and seeking to obtain 100% of the beans from sustainable sources. Another equally important goal is to reduce carbon emissions by 10% and reduce the use of water and energy resources. And at both of our factories, we invest in projects that help achieve these goals.
Regarding this difficult year, Mondelēz Ukraine, as a socially responsible company, could not stay away from the pandemic, therefore, it allocated funds for the purchase of a video bronchoscope for one of the hospitals, and one of our brands, Halls, breath freshening candies, launched a separate campaign #ПожертвуйСловаПідтримки and purchased 5 ventilators I.C.U. for Ukrainian hospitals. Also, in 2020, we donated about 3 tons of our own products to help lonely elderly people and the most socially vulnerable groups.
And this is not the whole list of socially important initiatives of the company aimed at improving the lives of Ukrainians. Our goals and values are based on doing what’s right, so we strive to help those who need our support the most.
Please read: Crisis: a guideline for publicly exposed companies
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