industry

We're already targeting $2-billion business in India: Mondelez Chief


Mondelez International, the company behind Cadbury, Bournvita and Oreo, has spent more than Rs 1,800 crore over the past few years to set up manufacturing and research hub in India, a country where it controls two-thirds of the overall chocolate category. On his maiden visit to India after being at its helm for nearly two years, Dirk Van de Put, chairman and chief executive of Mondelez, said India holds extraordinarily high priority in terms of future growth and is one of the fastest growing countries for them globally. “It will be a country that will require more of our investment, so I need to make sure that I stay connected to that,” he told Sagar Malviya. Edited excerpts…

Your Indian business hasn’t reached the billion-dollar sales mark yet. When do you expect that to happen?

We are very very close to reaching the billion-dollar mark. At the end of the year I can tell you for sure; I would say that the rate we are going about, we should be doing well. If I look at the growth rate we are currently seeing, India is the highest in the world of any of our businesses. I’m already thinking about India being a $2 billion business and we need to get the people ready for that and that’s really what I’m expecting. The question is how much time is it going to take us. India is an important country for us and sizewise, it ranks into our most important business unit. It is also a country that is growing our business, one of the fastest around the world and we do see a lot of potential. If you think about snacking around the world in the future, 80% of the growth in snacking around the world will come from the developing markets, and as you can imagine, the role that India will play and the relationship that the Indian consumer has is important.

Despite being a snacking company globally, Mondelez is largely a chocolate maker in India…

Chocolate is one of our top two categories and we are the leader in chocolate globally. In India, it is more the development of other categories that still has lot of potential and, over time, we expect biscuits, candy and particularly, our beverages business will continue to grow at a faster pace than chocolate, and we get more balanced as it relates to our different categories.


Since the previous government has returned to power with a stronger mandate, do you think it will help your business?


What’s important for us is the ease of doing business and whether we can grow our business in the political climate. Is it easy for us to register new products and things like that, and what I would say is that in the past years this government had certainly improved ease of doing business here and significant progress was made; so with the government being reconfirmed, we assume stability will continue, which would make India a high priority for us. Certainly, in the top ten as it relates to size of the business, and in relation to the future, it is certainly the top three for us.


What makes the country so important when chocolates are still considered a discretionary spend?


There are a number of factors that make us believe that there is high potential in India. Per capita consumption of chocolate, for example, is 130 grams per year in India while in the UK, it is over 10 kg per year. So, the potential is high: we look at these countries in two ways — one is what is the current size, and second, what is the future potential of it. If you look at India in that sense, taking into account our position, our market share, our brands, the strength of our people, the strength of our operation, the width of our distribution, India does rank very high in our priorities.


But will you lower prices to make it more budget-friendly?


When we look at all the price points in India, we have products that are sold for Rs 5, which I think is very competitive and that is quite a substantial part of our sales here. Then it goes up all the way to premium pricing and that obviously can only be consumed by certain parts of the population. But I do tend to think we cover the whole spectrum quite well. We are proud of the fact that we can sell Rs 5 chocolates and still make a margin on it — we cannot do that in any other country. The other thing that’s important is that we have been here for 70 years — we kind of introduced chocolate to the country. Cadbury is the taste of the nation. So, I think with that base, we really have the potential to keep on developing.


Any new products you would like to launch from your global portfolio?


We still have plenty of opportunity in the categories we are currently playing. Yes, we are doing quite well in chocolate but we have a long way to go in biscuits, in candy and in beverages — we still have lot of opportunities there. Then, there are categories we are naturally interested in such as bakery products. We just announced acquisition of majority of healthy bar company in the US, so these are things that we would also like to do in India.





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