Mondelez i

Scorecard version 2, 31 October 2018.

Nutrition

• In early 2016, Mondelez introduced its updated ‘Strategy Globe’ and formulated a vision, ‘to be the best snacking company in the world.’ To achieve its vision and strategic focus, Mondelez has identified three growth ambitions: Grow our people, grow our business and grow our impact. In this context, it has developed a new platform, ‘Impact for Growth’ which the company sees as a focused approach to driving growth and delivering positive change.
• Mondelez factors nutrition into its decisions about acquisitions. The company also conducts extensive nutrition-related risk assessment to mitigate risks to support its ‘Well-being Strategy.’ This type of risk assessment is one of the most comprehensive from the companies assessed.
• Despite some strong elements described above, the company could strengthen its commitment to grow by making nutrition and health more central in its ‘Strategy Globe’ and by having it play a more integral and central role in its ‘growth ambitions.’ This should be built upon a clear commitment to deliver more, healthy foods with specific reference to low-income populations in both developed and developing markets.
• ‘Impact for Growth’ covers Mondelez’ global ‘Well-being Strategy’ which has three pillars: 1. Expanding ten existing well-being brands in Mondelez portfolio, with the goal of growing them at twice the rate of its base portfolio; 2. Renovating and improving the nutrition and ingredient profile of its best-selling brand; 3. Continuing to inspire consumers to snack mindfully and planning to deliver 15% of its revenue from portion-controlled snacks that are individually wrapped and have 200 calories or fewer.

Within these three pillars, Mondelez has formulated additional 2020 goals covering a broad range of nutrition-related topics such as product reformulation, developing its healthy product portfolio, labeling, marketing to children, consumer education and stakeholder engagement.

• Mondelez’s CEO, in conjunction with a Board Committee, is engaged in the review and progress of its ‘Well-being Strategy.’ The company has established a ‘Well-being Leadership Team’ that is overseen by three senior executives who report directly to the Board and the CEO. The ‘Well-being Leadership Team’ sets the direction of Mondelez global ‘Well-being Strategy.’ Even though the CEO’s accountability for the overall business strategy of which the ‘Well-being Strategy’ is an important component, Mondelez could strengthen this commitment by linking directly the remuneration of its CEO to its well-being objectives.
• To strengthen its ‘Well-being Strategy’, the company is encouraged to conduct annual internal audits of its delivery. It could also expand the formal panel that advises the Board with specialists from a broader range of expertise, such as marketing, labeling and promoting active lifestyles.
• The company annually publishes a progress report entitled, The Impact for Growth, and provides global updates on nutrition. Despite its global presence, the company does not publish separate reports for its major markets. Mondelez also does not yet follow the industry-leading practice of commissioning external verification of the nutrition information and data in its reports.

Undernutrition

• Mondelez commits to playing a role in combating undernutrition in low-income countries. The Board of Directors is involved in the strategic review of commercial opportunities available to Mondelez in addressing undernutrition and reviews all of its growth plans. This is an improvement in Mondelez’s approach since 2016.
• Mondelez has strategy in place for addressing undernutrition through non-commercial initiatives. The Mondelez International Foundation (MIF) is focused on addressing diet-related diseases among children aged six to 12. One of the key focus areas of MIF is to address undernutrition in developing countries. This is done through nutrition education, encouraging children to be active and focusing on improving access to fruits, vegetables and other fresh foods with rooftop gardens and micro-farms near schools.
• To strengthen its performance, Mondelez is encouraged to develop a well-structured strategy applicable to all developing countries, in which it sells its products guided by market research, or wider studies to assess the specific needs of undernourished populations in individual countries. The company should also establish a formal panel of specialists with a broad range of expertize such as fortification, targeted marketing, community engagement and knowledge of the causes and effective solutions to undernutrition.
• Mondelez reports on its efforts in tackling undernutrition in its progress reports and on its website. However, the commentary in those reports remains limited and the number of relevant key documents, such as its fortification policy, remain confidential. Mondelez should be more transparent about its actions in this area and publish policies, studies and examples of its activities with more detailed descriptions. It should also set objectives and report against them, providing a clear outlook in its progress in achieving them and its future plans.

Nutrition

• The company commits to invest in research and development (R&D) but did not provide evidence of specific nutrition-related R&D budget targets for the next few years. This makes it difficult to assess how strong the company’s commitment is.
• In FY2016, Mondelez reported that 70% of its new product development focused on products that meet consumers’ well-being needs - ‘Well-being Choices.’ Mondelez is encouraged to publish consolidated data of new healthy products introduced, annually, rather than just examples.
• In 2015, Mondelez set a goal that by 2020 half of its portfolio will be ‘Well-being Choices.’ These include ‘Better Choice snacks’ that have an improved nutrition profile, individually-wrapped ‘Portion Control’ options that have 200 calories or fewer, and ‘Lifestyle Choice snacks’ designed to meet specific consumer needs. The first two types of products must also meet the same baseline nutrition criteria used to assess new products/product renovation. Further, Mondelez requires that all types of product development meet its internal nutrition profiles and portion limits.
• Mondelez bases its approach to product reformulation on globally recognized nutrition science and dietary guidance from international bodies, including U.S. Dietary Guidelines, Institute of Medicine, CODEX Alimentarius, European Reference Intakes and other regional/national standards.
• The company’s Nutrient Profiling System (NPS) – the ‘Nutritional Requirements’ assesses products’ nutritional quality. This system sets baseline criteria for all products and more stringent criteria for its ‘Better Choices’. It considers both negative and positive nutrients.
• Mondelez has global 2020 reformulation targets related to sodium, saturated fat, portion size and whole grains. It reports against a 2012 baseline, indicates progress over the last three years and shows the status in relation to its 2020 target, an improvement since 2016. Nevertheless, as in 2016, the targets remain limited in scope - the lack of an added sugar target is a significant gap. The company also does not have a target to increase levels of fruit, vegetables, nuts or legumes, as relevant.
• In FY2016, Mondelez generated 26% of its revenue from ‘Better Choice’ products that meet strict category-specific nutrition criteria and 10% from ‘Portion Control options’. In terms of its global product portfolio, 29% of Mondelez SKUs meet ‘Better Choices’ criteria and 12% meet the ‘Portion Control’ criteria. However, the Product Profile estimated that only 7% of sales that year were generated from products that meet the healthy standard (HSR of 3.5 or more) and only 5% of products by number met that standard. The discrepancy between these figures and the company’s data implies that its specific nutritional thresholds and definition of ‘healthy’ within its NPS need to be recalibrated so that they align with well-verified systems such as HSR.
• Given the relatively small proportion of healthy products it makes, Mondelez should continue improving the health and nutrition profile of its products and seek to make its portfolio as healthy as possible within the context of being a confectionery and snack company. It should also keep investing in portion control.

Undernutrition

• Mondelez has a fortification policy which guides its efforts on appropriate fortification. In 2017, the company updated its policy and strengthened its approach to fortification. This had a positive impact on its score.
• The company commits that all nutrient additions/fortification must meet local regulations and must follow the general dietary guidance set out by local government agencies and/or authoritative bodies. Furthermore, it follows WHO/FAO guidelines on food fortification with micronutrients.
• Mondelez makes a specific commitment to fortify only products of high underlying nutritional quality that are appropriate to fortify and not to fortify indulgent products. Mondelez could strengthen its approach by extending its commitment to explicitly state it will seek to use ingredients with high inherent levels of micronutrients, including fortified staple ingredients. Unlike in 2016, Mondelez, through its foundation, commits to tackle undernutrition in developing countries with initiatives that aim to increase the volume of foods that address micronutrient deficiencies available to undernourished populations.
• Mondelez’s commercial and non-commercial activities focus on children over six and other populations. While commercially it operates in higher-priority countries, Mondelez’s philanthropic activities do not focus on these countries. Mondelez could strengthen its approach by placing more focus on higher-priority countries and populations with the highest risk of undernutrition.
• To improve further, Mondelez should be more transparent about its undernutrition efforts, publish its fortification policy and set specific targets with respect to increasing R&D spending on developing fortified products.

Nutrition

• As in 2016, Mondelez does not have affordability commitments for healthy foods nor a strategy to improve the accessibility of healthy foods that incorporates targets. For example, the number of consumers it intends to reach with healthy foods or the number of units it intends to sell.
• However, compared with 2016, Mondelez provided evidence of conducting analysis of the accessibility and pricing of healthy products among low-income populations in developing countries such as China, India, Brazil and Nigeria. Furthermore, Mondelez shared examples of improving the pricing of products that meet the company’s healthy standard. These examples include a re-launch of wholegrain Belvita breakfast biscuits in Brazil at a more affordable price for local consumers and offering single-serving sticks of Tang in China that are more affordable due to being in a smaller pack size.
• Compared with 2016, Mondelez has made some improvements in this area and is encouraged to continue this accessibility and affordability efforts for its healthy products.

Undernutrition

• Mondelez has improved its performance and score on the accessibility and affordability of products that address micronutrient deficiencies in developing markets. Unlike in 2016, Mondelez now makes a commitment to consider the affordability and accessibility of fortified products targeted towards populations with micronutrient deficiencies. To strengthen its commitment, the company could define objectives with respect to making its healthy products affordable and accessible.
• Mondelez shared commercial and non-commercial examples of improving the affordability and accessibility of fortified healthy products which meet the company definition of healthy. For example, in India, fortified Bournvita biscuits are offered in small affordable packs of six biscuits. In the Philippines, the company offers fortified Eden cheese spreads in low-unit packs. Its spreads are recognized by the Department of Health as part of the Sangkap Pinoy (fortification) Program, which was set up to address major nutrient deficiencies in the Philippines’s population. In Nigeria, Mondelez offers the Bournvita milk-based beverage, fortified with multiple micronutrients in a single-serve 20 gm packet sold at affordable price for lower income brackets.
• Its non-commercial approach to tackling the accessibility and affordability of fortified products is delivered by MIF which focuses on improving access to affordable fresh foods such as fruits and vegetables in local markets to address micronutrient needs. Its approach is based on external stakeholder input - from Yale University and local public health partners on the ground. In Indonesia, the MIF cooperated with Helen Keller International’s Enhanced Homestead Food Production (EHFP) program through which women have learned how to diversify their crops, resulting in better nutrition for their families. These are leading examples of how a confectionary and snacking company with few healthy products suitable for fortification can improve the accessibility and affordability of these products.
• To strengthen its performance, Mondelez could increase disclosure in a number of areas. For instance, it could publish its commitment and objectives to improve affordability and accessibility of products that address micronutrient deficiencies in developing countries and disclose examples of doing so.

Nutrition

• As in 2016, Mondelez commits to the International Chamber of Commerce (ICC) Code of Advertising and Marketing Communication Practice. Its marketing commitments are applied to all media assessed by the ATNI methodology. Mondelez has an internal auditing process in place which assesses compliance of its marketing practices with its responsible marketing commitments to all consumers. The company could improve its performance on the Index by appointing an independent external auditor to assess compliance on a regular basis and publishing the results of these assessments.
• Mondelez has its own global policy on marketing to children and participates in pledge organizations including IFBA, CFBAI, the E.U. pledge and pledges in Canada, Australia and Singapore. The company’s policy covers all media assessed by the ATNI methodology. This is a leading industry practice. As of January 2016, Mondelez is one of three companies that does not advertise its products in any media primarily directed to children under age 12, irrespective of the product’s nutritional profile. This is a major improvement since the last Index. Mondelez is one of four companies to have extended a ban on marketing in primary schools to secondary schools in all markets.
• However, as in the previous assessment, there are no commitments that prohibit any advertising near primary and secondary schools or other places popular with children, as recommended by the WHO. The company’s threshold for defining a child audience under 12 is 35% which is below the best-practice threshold of 25%. The company is encouraged to lower its threshold to this figure to further restrict the exposure of children to less healthy products.
• As in 2016, compliance with the IFBA, CFBAI, E.U. pledge and other pledge commitments are assessed on an annual basis by third-party auditors commissioned by the pledge organizations. The company also conducts compliance internally. Mondelez publishes in its Progress Report compliance levels for TV and digital media. Mondelez is one of only a handful of companies that explicitly commit to corrective action when non-compliant practices are found. This is an improvement compared to 2016. To meet best practice standards on auditing and compliance with marketing to children policy, Mondelez is encouraged to commission its own global annual independent third-party audits and publish the results.

Undernutrition

• Mondelez does not disclose any commitments or examples of marketing strategies designed to ensure that its healthy, fortified products reach undernourished populations in developing countries. The company should consider investing more in developing such strategies and reporting on their effectiveness.

Nutrition

• Mondelez commits to encourage and support its employees in having healthier lifestyles. The company offers a broad range of health and wellness programs to employees and, in some countries, to their families. Mondelez aims to achieve 100% participation. As in the previous Index, Mondelez conducts its own evaluations of the health impact of the nutrition, diet and activity elements of its health and wellness programs for at least one site. However, the company could enhance its impact by extending these programs to the families of all employees in all markets, and by commissioning independent evaluations of the programs and reporting the results.
• Since 2016, Mondelez has made some improvements in supporting breastfeeding mothers at work but has not yet codified this commitment in a global policy. The length of paid maternity leave and working arrangements offered to mothers varies by region and according to local legislation. Mondelez is encouraged to adopt and publish a consistent global policy with paid maternity leave of six months (if country legislation is not stronger) and to provide the same working arrangements and facilities globally to support all breastfeeding mothers.
• Mondelez is a leading performer on criterion E3: ‘Supporting consumer-oriented healthy eating and active lifestyles programs’. To support its ‘Well-being Strategy’, 80% of company and Mondelez Foundation contributions are directed to healthy lifestyles programs. The company defines healthy lifestyles programs as those that promote physical activity and good nutrition and educate on topics such as obesity, physical activity, eating habits, access to fresh foods and malnutrition.
• Mondelez is one of only two Index companies that funds healthy eating and healthy lifestyle programs only if they are set up and run by third-parties. Furthermore, Mondelez only supports and funds programs where the content is developed by an independent third-party. As in 2016, Mondelez demonstrates best practice by independently evaluating these programs' health impacts and disclosing the results. To strengthen its performance, Mondelez is encouraged to develop a policy which excludes brand-level sponsorship of consumer-orientated programs and content which aligns to relevant national dietary guidelines.

Undernutrition

• Mondelez ranks first in Category E (Undernutrition) and shows very strong performance in supporting consumer-oriented healthy eating and active lifestyles programs. Most of its consumer-education programs targeted at undernourished consumers are conducted through MIF.
• Mondelez is one of only two companies to have specific guidelines establishing funding criteria for undernutrition programs. Furthermore, Mondelez is the only company assessed that commits to exclusively supporting programs developed and implemented by independent organizations with relevant expertize. The company only supports and funds programs that are developed by an independent third-party over which the company has no editorial control. Mondelez also demonstrates best practice by commissioning independent evaluation of its programs' health impacts and by publicly disclosing these. This is an improvement since 2016.
• Examples of consumer education programs for the undernourished include: Mondelēz educational and school/community gardening programs available in Brazil, China, India, Indonesia, Mexico and South Africa, which focus on nutrition and healthy eating through classroom instruction on preparing fruits and vegetables that students grow themselves. In India, it supported the creation of mothers’ groups to provide nutrition and health education for women with infants and young children (aged zero to six). These groups teach the preparation of healthy foods, promote improved infant and young child feeding practices, and strengthen the participants’ skills and knowledge in making healthy, affordable food choices.

Nutrition

• As in 2016, Mondelez is committed to providing nutrition labeling on all products in all markets. The company reports that its approach to nutrition labeling is in line with international standards, including Codex Alimentarius. Mondelez provides labeling information per serving and/or per 100 grams on eight key nutrients. Mondelez front-of-pack (FOP) labels provide numeric information on the recommended daily intake such as Daily Value or Dietary Reference Intake. The company could better communicate the nutritional value of its products by using interpretive FOP labels globally. Similar to all companies, Mondelez should ensure to not undermine existing local interpretative FOP labeling systems by implementing alternative or additional systems.
• Mondelez discloses publicly that it has rolled out its full labeling commitments in all its markets. This is an improvement compared to 2016 and a leading practice among companies assessed on the 2018 Global Index.
• As in 2016, Mondelez commits only to placing a health or nutrition claim on a product when it complies with the relevant Codex Alimentarius standards or other regulatory standards such as those in the EU or U.S., unless national regulation is in place which takes precedence over these standards. Mondelez does not disclose publicly the percentage of SKUs (stock keeping units) that meet its healthy standard and which carry nutrition content or health claims and whether any complaints have been upheld against it about the misuse of health or nutrition content claims. This is an area it could focus on more.

Undernutrition

• Mondelez has improved considerably in this area. In 2016, the company did not score at all. Mondelez commits to labeling products that either have naturally high levels of micronutrients or that have been fortified with micronutrients. It also commits to include information on such nutrients on the label, in accordance with local regulations or by recognized bodies, such as Codex in those cases where country regulations or standards have not been set. This commitment also extends to health and nutrition claims - the company follows Codex standards in countries where there is no regulatory framework on the use of nutrition and health claims, and specifically mentions that this approach covers fortified products.
• In line with industry leading practice, Mondelez discloses its approach on labeling micronutrients for products targeted at consumers at risk of undernutrition for all relevant markets, and on using health and nutrition claims on fortified products.

Nutrition

• Mondelez has a policy on interacting with government officials and ‘Code of Conduct’ in place. The company provides a broad commentary about its participation in public dialogue on policy issues that affect its business, employees and communities. However, the company does not report on specific topics on which it engages with policymakers around the world and does not make an explicit commitment not to lobby against government initiatives to improve public health. To strengthen its approach, the company could commit to lobby only in support of public health policy initiatives in all markets.
• Mondelez could improve its transparency related to its commitments and activities on lobbying and influencing governments and policymakers on nutrition issues. The company only discloses its membership in U.S. trade associations, to which it paid dues of $50,000 or more and political expenditures. Moreover, it does not set out whether it has any governance conflicts of interest or holds board seats on industry associations and/or advisory bodies related to nutrition issues. Mondelez could improve its approach by extending disclosure on its lobbying related activities to all markets.
• The company engages on a number of topics related to its ‘Well-being Strategy’ with a wide range of stakeholders including academia, consumers, NGOs, governments, authorities and other relevant organizations. In the process of updating its ‘Well-being Strategy’ including improving its overall portfolio, Mondelez provided evidence of engaging with key stakeholders to solicit their input on its new strategy. Overall, Mondelez provided evidence of comprehensive, well-structured stakeholder engagement. To strengthen its performance, the company could disclose specific examples of how stakeholder input has been used to adapt its policies and strategies.

Undernutrition

• Mondelez provided a few examples of supporting developing countries governments’ efforts to introduce policies or regulations to address undernutrition. For example, in Nigeria, the company claims to support the government’s efforts in raising awareness of the Nigerian Fortification Standard. In the Philippines, Mondelez supported the Department of Health’s fortification program, Sangkap Pinoy, to help people identify and seek out those products that are fortified with the key micronutrients that are low in local diets. The company could improve its support of public policy to address undernutrition in developing countries by articulating a specific commitment and reporting publicly about relevant actions in this area.
• The company failed to provide evidence of one-on-one discussions with key organizations working on undernutrition to solicit input on its commercial strategy/policy/approach to undernutrition. This is an area it should focus on and increase transparency in its stakeholder engagement activities to address undernutrition.