Arnott’s vs Mondelez: The battle of the biscuit giants

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Arnott’s and Mondelez recently launched new biscuit products at the same time, in differing ways. But who won in store, and what was the impact of the lockdown in Victoria?

Perhaps capitalising on the consumer increase in snacking during Covid times, both Arnott’s and Mondelez launched new biscuit SKUs simultaneously recently, however the products and the execution varied. It was a close call as to who performed better overall in shoppers’ eyes, with the brands each strong in different areas of in-store execution, according to us.

In early August, Arnott’s launched Shortbread Cream Tiramisu and Monte Carlo Black Forest as part of its new dessert inspired range.  Mondelez, meanwhile, launched two Oreos SKUs – Salted Caramel, and Double Stuff.

Our Snooper’s shopper community visited 150 Woolworths, Coles and IGA stores between August 26 and September 1 (two weeks after the new products launched). Fifty per cent of stores visited were in Victoria, in order to determine impacts of lockdown. Visits were conducted during a promotions week.

As part of Snooper’s new products tracker, the shopper community assessed a range of in-store metrics across both brands including ranging, point-of-sale materials, facings and brand blocking, pricing and promotions and importantly ease of finding the new SKUs. 

Discover at a glance the results of our mission: Check out the Snooper NPD tracker ‘checklist’ for a successful launch.

So who ‘won’ each round?

Round #1 - Ranging: Mondelez is ranged in more stores

When it comes to ranging, the first difference observed in the manufacturers’ strategies was that Mondelez gave exclusivity to Woolworths on the Salted Caramel SKU.

When comparing speed to market, Mondelez was distributed in more stores than Arnott’s in the first weeks following the launch. 

While the distribution for both brands was comparable at Woolworths with more than 95 per cent of stores in the sample ranging all four innovations, in Coles Monte Carlo Black Forest was the lowest available SKU with 67 per cent distribution in the store sample versus 87 per cent for Oreo Double Stuff; and Arnott’s Shortbread Tiramisu was the lowest distributed SKU at IGA in 34 per cent of stores versus 57 per cent for Oreo Double Stuff, highlighting that Mondelez pushed for a stronger focus on independents than Arnott’s. 

As we noticed that only 17% of the IGA stores visited ranged all 3 new SKUs, we recommends to indentify the innovation-driven indies ahead for a product launch, in order to execute the best where-to-play strategy. 

Round #2 - POS: A similar execution for both brands

Both players invested in point of sale materials at Coles and Woolworths to support their launches with the execution ranking similar for both players and aisle fins found in 55 per cent of stores visited. 

A few variations though as Arnott’s was using one POS for both NPDs, when Mondelez was highlighting its Salted Caramel NPD at Woolworths only. 

We observed that POS execution was a bit disrupted by the lockdown in Victoria as we identified 48% POS presence in Victoria versus 66% POS presence in other states (average  POS presence fof both brands in all banners), likely because retailer staff were focused on essential tasks such as replenishment and safety measure adherence. 

Round #3 - Promo & Pricing: Arnott's chose to reflect the premium positioning of its dessert range

If shelf price is aligned at both Coles & WW, the price variance in regular shelf price is significant in independent network with 15% difference between min and max for Arnott’s NPDs’ reported price (average price being around $3,2) and up to 35% difference between min and max for Mondelez Oreo Double Stuff reported price (average price being around $2,3)! Arnotts is priced higher than Oreo, reflecting the premium positioning of their dessert range.

As far as promo prices are concerned, they are also aligned at both Coles & WW. The promo mechanics are the following ones: Arnott’s is doing 30% off  at both Coles and Woolies when Modelez is doing 25% off on Salted Caramel at Woolies and 2 for $3 on Double Stuff at Coles. 

The difference is significant at Indies level: if the independent network tends not to do promotion on the 2 SKUs from Arnott’s, it is promoting the Oreo Double Stuff price (but still, this promoted price remains 5% more expensive than the Coles & WW one.)

Round #4 - Layout Strategy: Mondelez wins with double facings in 50% Woolies

Mondelez wins at Woolworths when assessing the number of facings, with each Oreo SKU being double faced in 50 per cent of stores visited where the new Arnott’s SKUs were single faced. Howether, at Coles and IGA, both manufacturers introduced their new products with one facing. 

A noticeable difference has been observed in Shelf Ready Packaging as Oreo NPDs were consistently in SRP while Arnott’s Monte Carlo Black Forest was in SRP in 78% of stores and Shortbread Cream Tiramisu in 67% of stores only. 

Round #5 - Planogram Strategy

Both manufacturers launched their innovation in their brand block.

The winner of shelf position at Woolworths, using Shelf 2 (starting from the top) – the ‘eye level is buy level’ shelf as the goal – goes to Arnott’s at Woolworths, with close to 80 per cent of stores displaying the dessert inspired ranged at eye level compared to 60 per cent for the Oreo new products. At Coles, the winning position is split between Arnott’s and Oreo due to the difference in planogram strategy.  

While Woolworths tends to group all 5 dessert SKUs together, Coles is placing Arnott’s Shortbread Cream Tiramisu adjacent to other Desserts SKUs while Monte Carlo Black Forest is adjacent to other Monte Carlo SKUs. 

The split of the Arnott’s 2 new SKUs in a majority of Coles had a direct impact on  the easiness to find the products.
It seems that the lockdown in Victoria might have had an on Planogram execution.  Arnott’s new products were blocked in 60 per cent of Victorian Woolworths stores versus 88 per cent in other states. 

Last round - Easiness to find: Mondelez wins where it counts the most

Easiness to find is an outcome of a combination of ranging, shelf position, adjacencies, and POS support and could be considered the ‘pinnacle’ award. As Oreo was rated higher in easiness to find, it seems that the strategy of double facing and range distribution have paid off. 

While the aisle fin didn’t seem sufficient to help Arnott’s win the race, in stores where Arnott’s had merchandising material, the easiness to find significantly increased: Arnott’s was 1.7 times easier to find in Woolworths stores where there was an aisle fin.

Another important finding for Arnott’s was that the planogram impacted the easiness to find their dessert inspired range. The Woolworths strategy of blocking the range resulted in 52 per cent of shoppers rating the SKUs high or very high on ‘easy to find’ versus only 41 per cent for Coles. 

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If you are interested in this article released by Inside FMCG, you can read it online !

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