Mondelez Begins Construction Of New R&D Plant In Poland

Mondelez International, Inc. (NASDAQ:MDLZ) recently announced the ground breaking for a new research and development site in Poland, an important milestone for the company’s research/development network in Europe.

The state-of-the-art innovation hub located in Bielany Wroclawskie – fast becoming the Silicon Valley of Poland – will require an investment of $15 million. The facility, which will incorporate innovation labs, a new pilot plant and a creative space for new ideas, will support innovative chocolate and biscuit products including Power Brands like Cadbury Dairy Milk, Milka, Barni and Oreo.

The hub, expecting to host 250 scientists, engineers and other specialists from all over the world, will create huge employment opportunities in the region.

Innovation is an important growth strategy for Mondelez. It regularly refreshes its brand portfolio through product innovation and extension to newer geographies and platforms.

Going forward, it plans to offer more good-for-you snacks so much so that it expects 50% of its product portfolio to comprise “well-being” items by 2020, instead of the current one-third. Apart from simplifying the ingredients and improving nutritional benefits of existing products, the company will develop products that will meet growing consumer demand for healthier and natural items.

Mondelez, like many other U.S. food producers such as General Mills, Inc. (NYSE:GIS) , Campbell Soup Company (NYSE:CPB) and The Kraft Heinz Company (NASDAQ:KHC) , has struggled to come to terms with shifting consumer preference toward natural and organic ingredients over packaged and processed food. This has had an adverse effect on their top lines.

Mondelez’ Europe segment showed some improved sales trends in the first quarter of 2016, turning positive for the first time in many quarters. In the first half of 2015, the company had witnessed volume erosion and market share losses in Europe as it raised prices ahead of its competitors, especially in chocolate. However, market share improved through the second half of 2015 and in the first quarter of 2016, as price gaps narrowed with most European competitors.

Mondelez carries a Zacks Rank #3 (Hold).