FDBusiness.com

Mondelez International, the world’s pre-eminent maker of chocolate, biscuits, gum and candy as well as the second largest player in the global coffee market, is to invest $50 million (£30 million) in its Banbury, UK factory to build two new lines that will manufacture Tassimo beverage capsules. Tassimo is Europe’s fastest growing single-serve system, brewing a wide variety of beverages including Jacobs and Costa coffees and Cadbury hot chocolate.

The decision is part of Mondelez International’s multi-year investment in European manufacturing, under which $1.5 billion has been invested since 2010. The planned investment will create close to 80 roles and coincides with the 50^th anniversary of the Banbury factory, which produces coffee brands such as Kenco, Carte Noire and Maxwell House. The Tassimo capsules produced in Banbury will be exported to Western European coffee markets in France and Spain as well as distributed in the UK.

“Tassimo is a key driver of growth for our European coffee business, so this $50 million opportunity is a great one for Banbury,” says Phil Hodges, Senior Vice President, Integrated Supply Chain, Mondelez Europe. “Over the past 18 months, we’ve made similar investments in Bournville and Sheffield, underscoring our commitment to UK manufacturing. The proposed investment is part of our vision to manufacture our products on state-of-the-art lines that will enable us to meet growing demand while increasing our competitiveness.”

Continued investment in the plant has created an efficient and modern factory capable of producing both instant and capsule coffees for Mondelez International’s brands. The $50 million investment, conditional on commitments to flexibility and cost competitiveness, will fund two new Tassimo  coffee production lines to be installed in 2015.

The Tassimo beverage system, which was developed in Banbury prior to its launch in Europe in 2004, uses barcode technology to calculate the right amount of water, brewing time, and temperature for the specific beverage. Over the past five years, Tassimo achieved strong double-digit growth in Europe through a winning formula of convenience, an unrivalled brand portfolio and quality coffee.

“The proposed investment opportunity demonstrates that, in an increasingly competitive environment, the UK continues to be a prime location for large-scale manufacturing,” says  Paul Sinclair, Head of Manufacturing at the Mondelez International Banbury site. “We’re committed to securing this investment for Banbury by increasing flexibility and competitiveness, and we’re excited about showcasing the quality we can deliver to coffee drinkers in the UK and abroad by producing Tassimo in our factory.”

“This investment opportunity in Banbury is part of our ongoing supply chain reinvention plan,” adds Phil Hodges. “We’re implementing several such initiatives around the world to capitalize on growing demand, while also reducing costs and improving productivity.”

Mondelez International’s supply chain reinvention plan is expected to deliver $3 billion in gross-productivity savings, $1.5 billion in net savings and $1 billion in incremental cash over the next three years. The investment follows Mondelez Europe’s announced $100 million commitment to build a state-of-the-art biscuit factory in Czech Republic earlier this year, as well as the potential new investment of approximately $100 million for the Bournville chocolate manufacturing site in Birmingham, UK.

Coffee represents about 12% of Mondelez International’s total company portfolio globally or about $4 billion of revenue annually. In May 2014, Mondelez International and DE MASTER BLENDERS 1753 announced their intention to combine their respective coffee businesses to create the world’s leading pure-play coffee company called Jacobs Douwe Egberts in the course of 2015