In the next four years, Mondelez International is planning to invest Rs. 4000 crores in India, which will be mostly into manufacturing and the supply chain to fuel surging demand. The size of the investment is three times bigger than what they did over the past four years when the makers of Cadbury and Oreo spent Rs. 1500 crores.
“India is a priority market for us,” said Deepak Iyer, president of Mondelez International. “We continue to accelerate our investment, which will be in factories, warehousing, logistics, and routes to market such as the cold chain, including rural markets.”
India accounts for about $1.4 billion in revenue for parent company Mondelez, with the local unit controlling nearly two-thirds of the country’s chocolate market. The company said the fresh investment until 2026 will not include brand and advertising spending.
“This will actually help us really transform our manufacturing footprint by upgrading existing plants and also significantly putting up additional capacity and strengthening our route to market capabilities,” explained Iyer.
In the last few years, Mondelez has capitalized over $230 million, mainly to set up a greenfield plant at Sri City, Andhra Pradesh, and a global research, development, and quality (RDQ) hub at Thane, on the outskirts of Mumbai. Last year, the company posted double-digit growth in sales, jumping the slowdown trend in the overall market.
Actually, during an investor call last July, Mondelez stated that if they had the capacity, they could sell much more in India, and they have since added new production lines to meet the growing demand. According to Tofler, Mondelez posted a 16% jump in sales to Rs. 9,296 crores during FY22, while net profit fell 2% to Rs. 978 crores.
Although chocolates are synonymous with Cadbury in India, the company wants to be a snacking company instead of just being known as a chocolate maker.
Iyer said, “We are seeing significant momentum in our volume growth, driven by consumption of our categories, both by increasing per capita consumption and driving penetration with newer consumers.” We are very confident that that trajectory will continue.
With per capita consumption of chocolate around 200 grams per year in India, while it is over 10 kilos per year in the UK, the headroom is huge. Mars, the world’s largest chocolate maker, considers India to be one of its fastest-growing markets and has invested more than $200 million in its India operations.