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India a key market for Mondelez's global story

India a key market for Mondelez's global story

In India, the company is synonymous with brands such as Cadbury Dairy Milk, Bournvita, and has presence in biscuits through Oreo.

According to Mondelez International Chairman and Chief Executive Officer Dirk Van de Put, India has a mix of brands from its global portfolio (Cadbury and Oreo) and also an extension of them into other categories. According to Mondelez International Chairman and Chief Executive Officer Dirk Van de Put, India has a mix of brands from its global portfolio (Cadbury and Oreo) and also an extension of them into other categories.

Confectionery major Mondelez International had a revenue of $29 billion in fiscal 2021. The operations in India, known as Mondelez India Foods, made Rs 8,038 crore ($1.07 billion) or a modest 3.69 per cent of the total revenue. But make no mistake, this market is hugely strategic for the company.

In a virtual media roundtable, Mondelez International Chairman and Chief Executive Officer Dirk Van de Put outlined the broad plan for India. "The business has a strong plan to deliver sustained low double-digit growth till 2030," he said. Here, the company is synonymous with brands such as Cadbury Dairy Milk, the biggest brand in the Mondelez portfolio; Bournvita, the second largest in the overall malt-based drinks business; and has presence in biscuits through Oreo.

According to him, India has a mix of brands from its global portfolio (Cadbury and Oreo) and also an extension of them into other categories -- cookies and chocobakes choc-layered cakes being some examples. "We have brands uniquely local like Perk, Bournvita, 5 star and Gems," he pointed out. 

The Indian landscape is different from a retail point of view, where it is overwhelmingly dominated by the traditional mom-and-pop stores or kirana as they are more popularly known. For Mondelez, he said, 80 per cent of its sales is done through this, while 17 per cent from modern trade and a much smaller 3 per cent through digital. There are 3 million traditional stores that Mondelez reaches out and Van de Put said the company wants to double that number.

On digital, he explained that globally it brings in 6 per cent of the business. "In that context, 3 per cent in India is not too bad," he said.

By way of a background, Cadbury globally sold the company to Kraft in early 2010. In October 2012, Kraft spun off the snack business to form Mondelez. 

Van de Put, who came aboard in late 2017 from McCain Foods, replaced Irene Rosenfeld. While chocolates are the cash cow for the company in India, he made it clear that biscuits are huge opportunity. "We have a two per cent market share and our presence is now getting stronger with chocobakes choc-layered cakes," he said. While Oreo is the big one, the Bournvita franchise too has moved into biscuits. The dominant players in India's biscuit industry are Parle, Britannia and ITC. 

Responding to a query from Business Today on innovation, Van de Put emphasised that it was a critical component of the company's story globally. "For us, we look at what proportion of product sales comes from new products over the last three years. That is around 10 per cent, which is in line with or slightly above competition," he said. 

During the pandemic, Mondelez International realised having too many SKUs (stock keeping units or a number assigned to a product for inventory management) was not a good idea. "We then reduced that number with the objective of having a bigger impact on sales," he elaborated. According to him, innovation is not just about product formulation but also other areas such as ingredients, packaging, changes in the supply chain and in the business model too.

In India, Van de Put said, Mondelez launches about ten new products each year. "It is a different market where limited number of SKUs are driven by big innovation," he explained.

The innovation story in any market is broken up into what is done with the core brands and the other part being new forays.

Deepak Iyer, President India, Mondelez International, opened up on innovation in Bournville where it was rich dark chocolate and Silk Mousse in the case of Cadbury Dairy Milk from the core part of it. "Chocobakes choc layered, Fuse Fit and Trisbix, a savoury biscuit are examples of going into newer areas," he added.

Also read: Mondelez CEO may close plants in Ukraine if crisis becomes 'too dangerous'

Also read: Cadbury Dairy Milk 100% vegetarian! So are all products in India, says Mondelez

Published on: Feb 27, 2022, 8:23 PM IST
Posted by: Mohammad Haaris Beg, Feb 27, 2022, 8:18 PM IST