Mondelēz China shatters ‘Oreo must be sweet’ stereotype by launching hot chicken and wasabi flavors

07-Sep-2018 - Last updated on 07-Sep-2018 at 10:09 GMT

Pic: Mondelēz China

Mondelēz has launched two new Oreo flavors – spicy chicken wing and wasabi – in China to squash the misconception that ‘Oreos must be sweet,’ according to Yue Fu, VP of corporate and government affairs.

The new products, which were developed at Mondelēz’s Suzhou technical center, are available via e-commerce sites such as JD.com, as well as major retailers, including Walmart, RT-Mart, Auchan, Carrefour, Tesco and Suguo.

“During our market research, we learned that savory and spicy flavors in China’s snacks industry are flavors with big potential,” said Fu, noting that spicy flavor is particularly popular among young consumers.

“These two flavors will get young people’s attention and be sought after for their novelty and unusualness. As such, there will be naturally formed social buzz and driven purchases.”

Regaining market share

Mondelēz’s latest Oreo launches in China is also considered a strategy to compete with domestic biscuit manufacturers.

According to Mintel, snack brands that primarily market through e-commerce, such as Three Squirrels and Be & Cherry, have extended their product lines into biscuits and become a new threat to existing players.

“Mondelēz lost the most market share between 2015 and 2016 due to the poor performance of Oreo,” it said.

To regain market share, Fu said the company needs “to contemporize our portfolio to meet consumers’ changing needs.

“This is also an important demonstration of Mondelēz’s strategy to get closer to the Chinese market, to respect and meet the unique needs of local consumers, and cater to their preferences in product flavors,” he said.

China’s biscuit market has been growing steadily over the past year, driven by more creative, better looking and high-end products.

“Last year, Oreo upgraded its recipes and packages. This year to date, Oreo has recorded almost double-digit sales growth, and our market share has also increased,” said Fu.

Ramping up e-commerce

Fu added, Oreo is also ramping up its digital sales as Mondelēz hopes to generate over $1bn in e-commerce revenues by 2020.

The global snacking company started selling its biscuits via Tmall, which is owned by China’s largest e-commerce company Alibaba, in 2011. Its online sales quadrupled in 2015, which led Mondelēz to partner with Alibaba the following year.

Fu said: “Over the past two years, our ‘Play with Oreo’ marketing campaign has been very successful. We launched the Oreo Colorfilled, the Oreo Music Box and the Oreo DJ Mixer on e-commerce platforms.

“We also launched the AR (augmented reality) game in collaboration with Alipay (a Chinese mobile payment tool) to turn Oreo into an ‘edible gaming machine.’ All this was highly recognized by consumers.”

In Q2, 2018, Mondelēz delivered mid-single-digit sales growth in China, driven by biscuits, and gifting and personalization on e-commerce platforms.