Sophie Yu, Siddharth Cavale and Sophie Yu

(Reuters) – Initial reactions to the Oreo Zero sugar-free cookie launch in China were disappointing. Mondelez International Inc (NASDAQ) CEO said that this highlighted some of the problems facing the multinational snack company as it attempts to make a strong push on the market.

Mondelez launched Oreo Zero China in August. It took inspiration from the growing popularity of sugar-free and reduced-sugar diets on social media and limited availability for zero-sugar biscuits.

Dirk Van de Put (Chairman and Chief Executive Officer) stated that “the reaction of the customer has been a bit disappointing… for some reason, the consumers feel it’s not the real deal.”

He said, “This is the problem.” He said, “We have the ability to offer products to the customer but we don’t know if they’ll buy or eat them.”

Mondelez is also the manufacturer of Ritz crackers (belVita biscuits), Cadbury chocolates, and Trident gum. They have set a goal to increase Oreo’s sales by $1 Billion by 2023. Global sales of Oreos surpassed $3Billion in 2019,

Oreo Zero cookies are made with maltitol, instead of sugars such as sucrose or glucose. This tweak results in a slight taste difference that is only noticeable to heavy Oreos consumers, the company claims.

Global snack companies that have a strong brand or product are facing a problem with the lukewarm response from consumers. Mondelez adjusts the sugar content of Oreos for different countries. Oreos are lower in sugar in China than they are in the United States. This may make it easier to transition from no-sugar cookies.

However, Chinese consumers remain skeptical about the claims of packaged food containing no sugar, according to Michael Norris (research and strategy manager, Shanghai-based consultancy AgencyChina).

According to June Dongxing Securities, only 1.25% China’s soft drink market was dominated by sugar-free beverages in 2019. However, Genki Forest’s sugarless fizzy drinks, and Suntory Oolong tea, are growing in popularity.

CHINA

Van de Put claimed that Mondelez would continue to sell Oreo Zero China in spite of weak initial demand. Van de Put compared Oreo Zero to Diet Coke, which also had a low consumer reaction at the beginning, but is now one Coca-Cola (NYSE :)’s best-selling products worldwide.

“It is difficult for the consumer to see in this space,” he stated.

In an email statement sent to Mondelez from Chicago, Illinois, Mondelez declined to confirm whether Oreo Zero would be sold worldwide. Mondelez’s chief finance officer, Luca Zaramella said that China saw a rise in biscuit sales during the third quarter. Oreos were the “standout performer” for China.

Mondelez doesn’t disclose the sales figures of its Oreo new product.

Van de Put became the CEO of Van de Put in 2017. Both countries are home to high diabetes rates.

Van de Put told Reuters, too that he believes Mondelez will overtake North America’s market in Asia, Middle East and Africa (AMEA), within five years. The annual report revealed that Mondelez had $26.5 billion in total revenue for 2020. AMEA accounted to 22% of this, North America 31% and Europe 38%.