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Mondelez International: A rich diet

By William D Alessandro on August 01, 2015 at 5:07pm.

Context:
Mondelez International describes itself as a snack food company.  That is not half the story. 

Reciting the company’s famous brands aloud takes more than a minute.  A much abbreviated list might include BelVita, Cadbury, Chips Ahoy!, Clight, Club Social, Cote d'Or, Dentyne, Honey Maid, Lactca, Lu, Nabisco, Nilla, Oreo,  Premium, Prince, Ritz, Tiger, Toblerone, Trident, and Triscuit. 

Nine of the brands each earn an annual billion US dollars; 58 others each generate more than $100 million a year.  Revenues in 2014 were $34 billion (€31 billion).  About three-quarters of it comes from sales of biscuits, chocolate, and chewing gum.  Nearly 40% of the revenues are from emerging markets. 

Previously part of Kraft Foods, Mondelez became a separate, publicly traded company under the new name in 2012.  The re-branding is a combination of the Romance language words for “world” and “delicious”.   Headquarters are located in Deerfield, Illinois, a commuting distance from Chicago.  Deerfield is the home of other international corporations, including Walgreens Boots Alliance. 
 
“Our dream is to create delicious moments of joy in everything we do,” the company says in a fact sheet titled “Unleashing a Global Snacking Powerhouse.”

Content:
Mondelez highlights performance against their social and environmental targets in a 48-page report “The Call for Well-Being.”  The title refers to a manifesto delivered on page four.  The 84-word proclamation seeks a state of health and prosperity not just for the company but for the world as a whole.

The report then proceeds to cover four areas of action deemed to be of material concern for the company:

• Mindful snacking, i.e., “eating with intention”;

• Sustainability, i.e., securing quality agricultural supplies and reducing the company’s environmental footprint;

• Safety, i.e., protecting employees and consumers; and

• Community, i.e., partnerships to promote healthy lifestyles.

A chart for each of the four topics displays the goals, the progress made by the end of 2014 (goal achieved; or more needed; or on target), and a sentence or two of elaboration on some key aspects of the indicator. 

Several subjects get special treatment with a narrative, photos, and additional charts.   One is of them women’s rights in farming cocoa (Mondelez is the largest cocoa buyer in the world).   Another is a partnership for wheat supplies in Europe where Mondelez is the largest baker of biscuits.  Coffee sourcing gets two pages on its own merit.  Mondelez is number two in the world with brands such as Jacobs, Carte Noire, Kenco, and Tassimo.  The environmental concerns featured are packaging, greenhouse gas emissions, and water. 

Seven pages are devoted to “mindful snacking” with its own set of performance targets and programmes.  They include Better Choices (stricter nutrition criteria compared with the company’s existing products), Mindful Portions (individually wrapped snacks that are 200 calories or less), and prominent labelling about calories and nutritional information.   The point is to make people “more conscious about what and how much we are consuming.”

Communication:
Mondelez is a paragon of efficient sustainability reporting.  The company’s plans and actions are stated clearly and concisely.  The writing is simple but instructive (for the most part).  The narratives put the company’s outlook and approaches into a reasonably fair, global context.     

The report contains 56 hot links.  They connect either to the company’s own web sites where more can be found about policies, action plans, and procedures, or to one or another of the sites managed by an external organisation.  Mondelez have a diverse assortment of alliances and partnerships, and adhere to many independent codes of practice. 

Nothing in the report stands out as unique for corporate sustainability disclosures, or is especially engaging.  The entire menu, however, amounts to more than each course Mondelez serves up.  Text, charts, photos, and style all mesh together.  The effect is a flawless reflection of the company’s business mindset.  

Credibility:
The report neither claims nor appears to follow any national or international guidelines.  It contains no assurance statement.  However, references are given to independent certifications and self-declared protocols — for instance on standards relating to food safety, ethical trade, occupational safety, and governance.

The process of determining material risks is discussed.  The World Wildlife Fund, Quantis (environmental lifecycle consultants), and “various socially responsible investment groups” are said to have participated in the task. 

A lame remark here and there erodes faith in the motives underlying the report, like this one:   “Our snacks serve different needs — they can curb people’s hunger; give them a nutritional boost; or simply provide a delicious moment of joy.”   The misgivings simmer along with the realisation that nothing much is divulged about what is going wrong. 

The main snag is the credibility of “mindful snacking.”   It’s an inventive campaign.  Mondelez is able to pursue an upbeat, constructive approach to deal with problems caused by the consumption of sugary and savoury foods.   

The report has a lot to say about the company’s efforts to improve lifestyles and diets, and about the policy on advertising to children.   How this plays out is explained accurately but selectively.  What does not fit the script is left out.  A case in point is the campaign lasting almost 10 years to increase the sales of s’mores, a popular concoction traditionally cooked up at campgrounds in the US and Canada.  (Each year August 10 is National S’mores Day.) 

This year Mondelez teamed with competitors to produce a video [ http://bcove.me/3ncgjiki ] of children camping out for the first time in a park in New York City.  Their day ends by enjoying the snack, which consists of roasted (Kraft Heinz) marshmallow with a layer of (Hershey) chocolate bar melted between two (Honey Maid) graham crackers.  

“Gooey,” one of the kids says.
 
Recommendations:
1.  Cut out the schmaltz.

2.  Address issues that drew you into important controversies and generated criticisms during the reporting period.

3.  Include views from outsiders about the contents of your report.

William D’Alessandro is president of Victor House News Co., an independent agency reporting on law and the environment for trade publications and executive newsletters.  He also edits Crosslands Bulletin http://www.crosslandsbulletin.com covering strategic corporate environmental management and sustainability issues.