Mondelez International Inc., trying to adapt as more shoppers buy food outside of traditional grocery stores, is diving deeper into online retail with a holiday-season website that is selling tins of Oreos directly to consumers.
Big food companies, which have dominated the shelves for decades, have had mixed results selling products directly in recent years as online retail slowly takes hold in the grocery industry. The holiday Oreo website, which kicked off Monday at gifts.oreo.com, marks the first time Mondelez will directly handle the supply chain and shipping, without going through a store or online retailer.
Mondelez created a dedicated e-commerce team last year with a goal of generating $1 billion in revenue by 2020. Most of that money will come from customers shifting their purchases online — buying snacks like Triscuits and Toblerone chocolate on Amazon or Wal-Mart's website, rather that visiting a store. Yet, Mondelez said it also can increase sales with seasonal offers directly through its website, selling products that customers won't find elsewhere.
"There's definitely value in scarcity," said Arthur Sevilla, global director of e-commerce strategy at the Deerfield, Ill.-based company. "As social media becomes the predominant market value, scarcity drives buzz."
Mondelez had a holiday website in the U.S. in 2015, and did a direct-to-consumer test in China with Alibaba earlier this year. But in both cases, the company outsourced the logistics, cutting down on profit margins. In the past 18 months, the Mondelez e-commerce team, which includes Amazon veterans, has grown to more than 60 employees from four when it started.
The 2016 holiday website, which sells Oreo tins for $19.99, allows customers to send cookies to friends, using only a mobile number or e-mail address. The technology the company has developed for the Oreo holiday experiment could be used profitably in other regions for similar limited-time offers, Sevilla said.
"If it's successful, we'll import this model to other markets," he said.
Last year, General Mills abandoned a direct-to-consumer snack subscription service after a year-and-half. Kellogg, meanwhile, teamed with IBM Corp. earlier this year on a website that lets shoppers order customized granola.
The food-and-beverage market in the U.S. is worth about $800 billion, and now about $33 billion, or 4 percent, of those sales occur online, according to John Blackledge, an analyst at Cowen & Co.