Cadbury and Oreo maker adds 1.3 lakh retail outlets in September quarter, sees further opportunities despite rising input costs
Mondelez International is maintaining its growth momentum in India, with its business recording more than 20% year-on-year revenue growth in the September quarter, even as inflation and rising operating costs weigh on consumer markets. The global confectionery major is now looking to strengthen its retail footprint further, identifying distribution expansion as a major driver of future growth.
The maker of Cadbury chocolates and Oreo biscuits added approximately 1.3 lakh outlets to its Indian distribution network during the third quarter ended September. The expansion reflects the company’s strategy to penetrate India’s highly fragmented retail market, where traditional neighbourhood stores continue to play an important role in packaged food and confectionery sales.
Mondelez believes there is considerable scope to expand beyond its existing retail network. The company is focusing not only on adding new points of sale but also on improving the quality of distribution by increasing product availability and the number of stock-keeping units (SKUs) carried by existing retailers.
Chief Executive Dirk Van de Put told investors that India remained an important growth market for the company, despite inflationary pressures linked partly to the conflict in West Asia. He acknowledged that higher costs were affecting consumers but said the company continued to see encouraging demand across emerging markets.
The company’s strong Indian performance has been supported by its efforts to improve product accessibility and strengthen its presence across retail channels. Chief Operating Officer Luca Zaramella attributed the growth to a focused approach towards identifying additional distribution opportunities.
According to Zaramella, the opportunity extends beyond entering new outlets. Mondelez sees significant potential in upgrading its existing retail network and encouraging retailers to stock a wider range of products. Improving the availability of different pack sizes and product varieties could help the company generate additional sales from stores already within its distribution system.
India’s vast traditional trade network offers a significant opportunity for this strategy. Expanding product availability across smaller retail outlets can help brands reach consumers in markets where modern retail penetration remains limited.
However, the growth outlook comes with cost-related challenges. The West Asia conflict has contributed to higher freight, fuel and transportation expenses, while dairy, edible oil and packaging costs have also increased. These pressures are creating additional challenges for food and confectionery manufacturers already navigating changing consumer spending patterns.
Mondelez said it was absorbing the additional costs within its existing financial outlook, indicating that it remains committed to sustaining its growth strategy despite the inflationary environment.
The company’s confidence in India also reflects the country’s growing importance in the global packaged food and confectionery market. Rising consumption opportunities, a large retail network and the potential to deepen distribution continue to make the market attractive for multinational food companies.
For Mondelez, the next phase of growth will depend on converting wider retail access into stronger product sales. With 1.3 lakh additional outlets already added in the September quarter and further opportunities to expand its existing network, India remains a significant growth opportunity for the company.