Mondelez, The Maker of Cadbury, is Happy with Rising Demand Despite Stress, Inflation
December 7, 2022: Confectionery major Mondelez, the maker of Cadbury chocolates, is driving its sales with new innovations in different categories and distribution expansion, especially in hinterlands.
Confectionery major Mondelez, the maker of Cadbury chocolates and Oreo biscuits, said chocolate sales saw strong volume growth, defying a declining trend in the overall market and expectations that the recession could drive consumers away from comfort foods in tough times and inflation.
In February this year, Mondelez International estimated that annual revenue from India would reach $2 billion by 2030, up from the current $1.2 billion.
The company will focus on expanding its market share in the biscuit category, where companies like Parle Britannia hold top positions.
Last year, India contributed around 19 percent of the company’s global revenue. Deepak Iyer, president of Mondelez India, which controls two-thirds of the chocolate market, told ET: “We are seeing a lot of growth by double-digit volumes, which is quite an exception given the muted volume growth in the industry.”
He added: “In case of a severe lockdown, it is discretionary as to who will be released first. But if you’re talking about sad times, it’s a great comfort food.
So I don’t think it’s more recession or non-recession leadership. A lot of it is about how the business has been affected, the reasons behind it and how chocolate or biscuits solve it.
The food giant attributes its sales to new innovations across categories and expansion of distribution, especially in the hinterland, which is a relatively weak area.
Therefore, the rural area now accounts for a fifth of its total sales, almost double from 10-12 percent five years ago.
The company said that per capita consumption of chocolate in the UK is over 10kg per year. However, in India, it is around 140 grams per year – a huge headroom for growth.
Iyer was quoted in the publication as saying, “It is very important for us to focus on consumption and consumption means volume.
And we always see three levers to pull the lever to press. One is brand consistency. Second is brand availability and third is brand affordability.”
Meanwhile, the company, which sells food products under Perk, James and Bornvita, including Cadbury Dairy Milk, 5 Star, Bornvita among others, reported a 16 per cent year-on-year jump in FY22 revenue.
However, according to financial data accessed by business intelligence platform Toffler, the company reported a 2.3 percent decline in profit for the fiscal year to Rs. 978 crore was recorded.
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