Dec 1, Reuters - Initial reaction from Oreo Zero sugar-free cookies in China has been disappointing, according to Mondelez International Inc's CEO, underscoring some of the challenges facing the global snack giant as it makes a big push in the market.
In August, com news oreo-zero sandwich - 160607636. html Oreo Zero in China took a cue from social media trends showing reduced sugar and sugar-free diets as a key trend, and the limited availability of zero-sugar biscuits in the country.
Chairman and Chief Executive Officer Dirk Van de Put said that the consumer's reaction has been a little bit disappointing for one reason or the other, the consumers feel it is not the real thing.
He said this indicates the dilemma. We can offer the products to the consumer, but it's not certain that the consumer will buy and eat them. Mondelez has set a goal to grow Oreo sales by $1 billion by the end of 2023, which includes Ritz crackers, belVita biscuits, Cadbury chocolates and Trident gum. In the year 2019 the brand had over $3 billion in global sales.
Oreo Zero cookies contain maltitol instead of traditional sugars like sucrose and glucose, and the tweak gives a very slight difference in taste that only heavy consumers of regular Oreos would be able to identify, according to the company.
The lukewarm consumer response underscores a challenge for global snack firms with a well-known brand and product. Mondelez varies the amount of sugar it includes in Oreos in different markets around the world. In the United States, Oreos have less sugar than do Oreos, which could make for an easier transition to no-sugar cookies.
The research and strategy manager at Shanghai-based consultancy AgencyChina, Michael Norris, said Chinese consumers are cautious about packaged foods' no-sugar claims.
According to a June Dongxing Securities report, sugar-free drinks accounted for only 1.25% of China's soft drinks market in 2019, though Genki Forest's sugar-free fizzy drinks and Suntory's Oolong tea are gaining popularity.
Van de Put said Mondelez will continue to sell Oreo Zero in China despite weak initial demand, but he said it will be compared to Diet Coke, a sugar-free soda that has received muted consumer response, but it has now become one of Coca-Cola's top selling products in the world.
The consumer's mind is very hard to identify in this area, he said.
Mondelez, a Chicago-based Mondelez, did not say whether it would sell Oreo Zero globally, in an emailed statement. Mondelez said that its biscuit sales in China climbed by mid-single digits during the third quarter. Oreos were the standout performer, Luca Zaramella, Mondelez's chief financial officer said on a November conference call.
Mondelez does not reveal the sales figures for the new Oreo product.
Van de Put, who became CEO in 2017 in India and China, said that winning in India and China is absolutely critical. Both countries have high rates of diabetes.
Van de Put said that he expects Mondelez's business in Asia, the Middle East and Africa AMEA to surpass North America as its second-biggest market in five years. Of Mondelez's $26.5 billion total revenue in 2020, AMEA accounted for 22%, North America 31% and Europe 38%, according to its annual report.