For Mondelez International, the Indian market is leading the way as the chocolate and biscuit maker looks at low-unit pricing for its chocolates in emerging markets. India as a market sees a majority of its consumption coming from rural households, where smaller or value packs at low price points see most takers.
Speaking at the Alliance Bernstein 37th Annual Strategic Decisions Conference, Dirk Van De Put, chief executive officer (CEO) of Mondelez International said as the company works to develop its presence in low-priced segments in emerging markets, India is one country that has cracked this, and is now setting the example for the world.
"We are doing a lot, for instance, on low unit pricing around the world. Every country is trying to launch its chocolate at the ideal price point. India, of course, is setting the example where they’ve really cracked that, and they know how to do it. And so, they’re kind of the example we have for the world," Van De Put said.
He said restrictions imposed across India amid the massive surge in COVID-19 cases in the second wave are not materially affecting the company’s sales. Van De Put said India's performance will still look ‘very good' in the second quarter of 2021, compared to last year, aided by a weak base.
His optimism stems from the fact that India has not seen a total lockdown, but only local restrictions across the country. "There’s only about 10 percent of the population that’s in a total knockdown. And so, the restrictions are not materially affecting our sales," he said.
In the first quarter, the maker of Cadbury Daily Milk and Oreo saw double-digit growth in India, along with other emerging markets such as China and Brazil. Specifically in India, the performance was 'spectacular' in the first quarter, the CEO added.
"I think that was driven by the persistence of our teams, doing a great job, keeping our supply chain running, keeping in contact with our clients, I think also a little bit of a shift in the eyes of the consumer where they prefer packaged food versus street food and snacking," Van De Put said.
As per industry sources, Mondelez India crossed $1 billion in sales last year. Meanwhile, the company claims to be a market leader in the chocolate category in India with over 65 percent of the market share (as per Nielsen), with Cadbury Dairy Milk alone commanding a market share of over 40 percent.
The CEO also expressed similar confidence in the Indian market while addressing its January-March 2021 results in April, where he said India delivered extraordinary growth on the back of ‘great execution’ and robust consumption in chocolates and biscuits.
Mondelez International also sees a lot of headroom for growth in the country, having added 330,000 new outlets in India in the last two years. There are around 9 million food retail stores in India, of which, Mondelez says it currently covers about 1.7 million directly and 3.2 million indirectly through wholesalers and distributors.
"So, still a lot of headroom for us. The consequence of this has been around the world that we’ve added about 150 million households penetration in the last 12 months," Van de Put said.
From a brand point of view too, the company expects its largest brand Oreo, to cross $100 million in sales in India. Currently, 60 percent of Oreo sales come from the US and China, with India being the third-largest market for Oreo.
"We have built really a very strong brand in each country. We know how to do it. India is the next one, where Oreo will surpass $100 million. So, still, a long way to go to $1 billion, as we have in China and the US. But, we are on our way," he said.
Mondelez India has been expanding its product portfolio too, under its two biggest brands Cadbury and Oreo. Most recently, the company launched products such as Cadbury Oreo Milkshake Mix, Cadbury Dairy Milk Silk Oreo, Cadbury Dairy Milk in Lickables, Oreo Cadbury Dipped, etc.
(Edited by : Jomy Jos Pullokaran)
First Published: IST