"A crisis doesn't create character, it reveals it." That's according to Dirk Van de Put, chairman and CEO of Mondelēz International, who gave an insightful presentation at the GFSI Conference this week on how the confectionery giant responded to the COVID-19 crisis.
Van de Put was among the speakers on Day One (23 March) of the conference, which the Consumer Goods Forum is hosting in a virtual setting this year due to the COVID-19 pandemic. As he explained, the coronavirus situation led to both he and the business that he leads face down plenty of challenges, but also presented opportunities to emerge stronger once the pandemic has subsided.
"Being prepared for a crisis is important, but you never know what a crisis is going to be like," Van de Put told GSFI director Erica Sheward, adding that Mondelēz as a business is "relatively well organised" to deal with potential crises, with a number of management teams to deal with unique situations.
COVID-19 sharpened minds at Mondelēz, Van de Put explained, and prompted the business to take a number of measures to deal with innumerable 'what if' scenarios. "For example, would the banking system collapse, and if so, what would that mean for our liquidity?", he explained.
Another core focus was business continuity – as Van de Put explained, while consumption of its products rose considerably, particularly in North America, it was simultaneously more difficult to maintain its operations as usual, with logistics issues and absenteeism present.
"At the beginning, nobody was clear how big and how fast this would grow," he said. "In a typical food safety crisis, you know the playbook, but in this case there was no playbook."
Mondelēz began to closely monitor what it could, he explained, although the level to which COVID-19 was starting to affect business around the world "was just mind boggling" As the crisis continued, however, the company was able to gain more clarity on what it needed to focus on.
"For example, when the pandemic hit, we were in the middle of taking over a business in Canada, and we had to inspect their plants to ensure they meet food safety guidelines," he said. "But when you can't get access, how can you do that virtually? We had to come up with solutions."
Clarity And Honesty
In a situation as erratic as COVID-19, "clarity and honesty are the most important business principles," the Mondelēz CEO put it. "You need to make sure that as a leader, you are crystal clear about what needs to happen, and you show the conviction of that clarity."
One of the positives to emerge from the crisis, he added, was the "understanding and natural inclination" to put people and safety first, which was present across the whole retail and consumer goods spectrum. "Some leaders might think that business comes before anything else, but this is not the case, particularly in a situation like this one."
At the same time, the pandemic has enabled businesses to "create a platform in which things are possible that usually aren't possible," said Van de Put.
In Mondelēz' case, this included simplifying the business – the firm 'significantly' reduced the number of SKUs it had, thereby alleviating both production and in-store stocking – as well as driving more flexibility into operations.
"We were lucky in that we had already set up the company for things like remote working, so we were already on that path," he explained. "We are going to reduce our office space by around 40% as a result of the pandemic. In the end, we will of course go back to the office, maybe not full time, but in some capacity."
The coronavirus has enabled Mondelēz to take a closer look at its strategy and "lift out the elements that we know will help us to emerge stronger," said Van de Put. In addition, it has facilitated greater acceleration of projects, as "we have been able to do the things we wanted to do, and do them much faster".
At the end of January, Mondelēz International announced that full-year net revenues rose by 2.8% last year, primarily driven by organic net revenue growth of 3.7%.
The GFSI Conference continues until Thursday. For more information, visit www.mygfsi.com.
© 2021 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.