Toblerone Affected by Direct Costs in the UK

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Mondelez Schweiz, owner of Cadbury and creator of Toblerone has announced that it is increasing the gaps between the peaks of the Toblerone chocolate bar in the UK.

Mondelez have said that the strategic move is down to the rise of Direct costs and not because of the impending Brexit!

Toblerone lovers all over the UK are distraught by the change and stated that the chocolate bar looks ‘stupid’. In a statement on the Toblerone Facebook page, the company said: “We had to make a decision between changing the shape of the bar, and raising the price. We chose to change the shape to keep the product affordable for our customers, and it enables us to keep offering a great value product.”

The bold move by Mondelez has resulted in the weight of the 400g bars being reduced to 360g and the 170g bars to 150g, while the size of the iconic triangle shaped packaging has remained the same. Maybe time for a packaging rethink?

So what can Mondelez do to make direct and indirect cost savings in other areas? Can they make changes to their procurement that doesn’t upset their customers or is it worth up setting customers to save money and gain some PR just before the biggest chocolate selling period of the year?

Direct costs:

  • Outsourcing – Mondelez could consider outsourcing certain production tasks to save on costs.
  • Materials – Mondelez can use their buying power as a large chocolate manufacturer and owner of Cadburys to reduce the cost of the packaging materials they use or as suggested reduce the size of the packaging
  • Equipment – The cost of equipment can be substantial, so Mondelez can look into purchasing refurbished equipment or lease the necessary equipment.
  • Ingredients – Switching suppliers or renegotiating contracts with existing suppliers to get a better cost saving on their current raw ingredients

Alternatively they could consider outsourcing their procurement to a consultancy because is it really worth upsetting your customer?

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