Mar 27, 2020
Mondelēz India is eyeing to increase its biscuit portfolio as it looks for a greater distribution reach in the country. The company, which produces chocolates under the Cadbury brand, has a foothold in the biscuits category with Oreo and Bournvita Biscuits.
Nearly 20 per cent of Mondelēz India’s total sales come from rural markets that include smaller value packs of ₹1, ₹2, ₹5 and even ₹10.
The plan is expand into all biscuit categories including premium ones such as ‘indulgence’ and ‘Choco bakery’. To start with, it launched the Cadbury Chocobakes about three months back, targeting urban markets. The Choco bakery category is pegged to become a $1-billion market over the next five years; most major brands are targeting this segment to drive margins.
In fact Mondelēz added nearly 242,000 stores (selling biscuits) in 2019, of which 107,000 were in rural areas and the remaining 135,000 in urban areas.
According to Sudhanshu Nagpal, Associate Director, Marketing (Biscuits), Mondelēz India, and the company is working to expand the presence of its biscuit brands across all markets. For instance, there are distinct plans to expand Oreo’s penetration into the family biscuits category, while Bournvita Biscuits are being placed as a ‘healthy morning snack’ option. Cadbury Chocobake is being placed in the nascent Choco bakery category.
The chocolate giant has taken a long-term view of the country and are working on building our biscuit business accordingly.
At the moment the lockdown because of the coronavirus outbreak may come in the way of quick expansion, industry sources pointed out.
Edelweiss, in a recent report, said the virus has led to panic buying, triggering a stock-out in essentials, and is also advancing demand and FMCG companies are already staring at supply and distribution chain disruptions. Product launches could be delayed by a few quarters.
For Mondelēz India, biscuits continue to be a new category. It had entered the segment with Oreo in 2011. Over the years, the company explored adjacencies by getting into licensing pacts with ice-cream makers.
To protect the health and safety of its employees in parallel, it is working to ensure that products continue to be available to consumers across the country.
Mondelēz has manufacturing facilities in Maharashtra, Madhya Pradesh, Himachal Pradesh and Andhra Pradesh, in addition to external manufacturing facilities in Ludhiana, Rajpura and Bengaluru.