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| Edited By: Ashish K Tiwari |Source: DNA |Updated: Jun 26, 2019, 05:10 AM IST
Popular for its brands like Cadbury, Bournvita, and Oreo, among others, Mondelez International is gradually expanding its product portfolio in the Indian market that will soon cross revenues of $1 billion. Dirk Van De Put, chairman and chief executive officer, Mondelez International, spoke to media in Mumbai about challenges, addressing changing consumer demands, company's plans to expand its business in India and more. Ashish K Tiwari reports.
We announced a new strategy and a new purpose for the company last summer. And we're on a path of growing the company faster as we've done in the past. We are trying to do that by leading the future of snacking. Our purpose as a company is to empower people to snack right and it's all focused on snacking around the world. We have a mission to make sure that in different countries, our products are reaching to more consumers on a daily basis. We have a number of strategies to do so and obviously India within that is of very high importance for us. India, at this stage, is one of our key countries.
The current growth rate is very important as it's one of the fastest growing countries. And if we look at the future, and where the growth of snacking around the world will come from, India will play a significant role. So in today's world, and certainly in the future, India, for us is quite crucial. At the same time, our Indian business is very successful. The market here has been doing very well and witnessing double-digit growth for the last three years. It's a business that has a number of strengths that we can really use in the rest of the world. India is key to us not only due to the sheer size of the market and its importance in the future but also the fact that our local team is really proving that they can be quite successful and there are learnings to be had for the rest of the world.
It's a very big country and if you're in snacking, it's an impulse product and you need to be present in millions of stores across the country. You need to offer products at the right price across the range. Our main product category is chocolate, which is affected by heat. So the practical execution of being successful in the country is a big challenge. For our teams, they're doing really well and I'm very proud of what we're doing here. But if we want to grow, we need to do more of it and on a bigger scale. The second challenge, probably I would say is, we're a biscuit, chocolate, gum and candy company in the first place. But if I look at India, we are largely a chocolate company and I would like us to be bigger in the other categories as well to balance out our portfolio just like in the rest of the world. We've seen higher growth in our powder beverages, biscuits that we have seen our chocolate category, but the base is still too small. In terms of challenges for the overall FMCG market, I would say, it is going to be to offer the consumer the right products. I say this because there is much more fragmentation in the world and consumers want different tastes / types of products. You know that personalisation is a very big trend today. So how do we as an industry keep up with this trend because the whole FMCG industry was developed to be a scale-oriented business offering the same product everywhere in the world. So adapting to the personalisation trend in the best possible way is one of the biggest challenges.
India is a very hot country and there are a few countries like that around the world. The challenge from a chocolate perspective is that you need to keep the product refrigerated for most of the year, depending on which type of product you're talking about. So that adds some complexity to some of our supply chains around the world. But it's doable. And we have 300,000 visi coolers here in India to deal with this challenge. As far as other product categories are concerned, they don't necessarily need special protection/ distribution system. From a manufacturing and environmental perspective, yes, we have big programmes like reducing our carbon dioxide (CO2) emissions, water consumption and waste. I'm very proud to say that our business here in India is carbon and water negative and zero waste landfill, which is quite an achievement.
We are trying to balance indulgence versus health and wellness. We do try to understand where is the consumer going and what's important for the consumer. And clearly, I would say, sugar is a discussion at the moment. And so we need to reformulate some of our products with less sugar and we doing it. We'll see what the reaction is to this product and we will take it from there. If we have to reformulate more of our products, as you can understand, it's quite a bit of work. We want the new products to taste the same as the old product and I think is a great achievement to be able to do that. These are the big trends that are going on as it relates to health and wellness, which we have to keep an eye on. Things like non-GMO, organic, vegan etc. are among some of the other big trends. Our objective is to sell more products to more consumers around the world and we have to adapt to it.
First, the execution of going with a product to millions of stores in a way that we have to refrigerate the part of the range and put up the visi coolers. This makes sure that our presence in those stores is in a quality way and the consumer gets an excellent product. It's certainly a great learning experience for the rest of the world that we can use. We have similar countries where our execution is not so good and the way our Indian team does that is quite spectacular. The second big learning is how to offer a range of products that go from Rs 5 to Rs 260-odd and still make money. That I think is not very easy to do. Adapting to the local tastes, understanding what the consumer wants and launch products that are particularly adapted. I think our Indian group of people here has done an excellent job. The speed and tolerance at which they work is also a big inspiration for us. Overall, there's quite a bit of learning that we can take to the rest of the world. We are very proud of the India business and I think it's very nice business to have.
Globally, the growth we want to have obviously is organic by selling more of our products to more consumers. And that is the number one priority for our Indian business. Globally, we feel that there's a number of areas where we are better off making an acquisition than to develop it in-house because there is already a successful company. It might be the technology that we don't particularly have or an understanding of the consumer that we don't have. So acquisitions are an important part of our equation to grow. India is one of our most important countries. And it's going to be even more important for us in the future. We really want to grow fast in India. So if you put those two together, it's obvious that we are open to making acquisitions in India.
Overall, we are in six segments – biscuits, chocolate, gum, candy bar, beverages and cheese. At the moment, we have a good presence in powdered beverages and biscuits segment in India in addition to a significant presence in the chocolate category. Over time, we would expect to develop a significant presence in the other five categories in India as well. Then there are two other categories – bakery and health bars. We recently made an acquisition in the health bars' space. Our objective over time is to be the significant player in the entire spectrum of products in India.
