Mondelez test-markets cereal in snacking push, looks to expand presence

Mondelez India is test-marketing a breakfast cereal under Bournvita as part of a larger snacking push, intended to increase its presence across categories.
 

In a conversation with Business Standard, Parveen Dalal, sales director of Mondelez India, said the pilot was on in Maharashtra and Andhra Pradesh and would be expanded to more markets depending on the consumer response. “While there is a heightened sense of health among consumers due to the Covid-19 pandemic, people are also seeking different eat experiences,” Dalal said. “The foray into cereals is intended at tapping the morning snacking space, keeping in mind the nutritional needs that consumers are seeking,” he said.
 

While biscuits and health food drink Bournvita benefitted from the tailwinds provided by the pandemic and lockdown, sector experts said chocolates were slower to pick up pace, since indulgence took a back seat amid the pantry-loading and search for healthy food options by consumers.
 

Mondelez is the country's largest chocolate player and ranks among the top two health food drink makers in India. Its biscuit brands include Oreo is a popular name in the cream segment.

 

In the June quarter, Mondelez India said Global Chairman and Chief Executive officer Dirk Van de Put had recovered from the lockdown disruptions of April and May to report mid-single-digit growth in June. Van de Put had said the firm expected the second half of 2020 calendar year to be better than the first half, led by Unlock programme.
 

Dalal said the at-home snacking trend continued to be strong even though consumers were stepping out slowly but steadily as economic activity improved. E-commerce sales, he said, had accelerated, led by greater adoption of digital shopping habits by consumers.
 

“We’ve doubled our e-commerce business now versus pre-Covid and we are seeing growth come from not just Tier-I and -II, but even Tier-III markets,” he said. The shift in shopping habits has prompted Mondelez to invest in e-commerce business as it seeks to improve topline from this channel.
 

Though e-commerce sales as a share of total sales for Mondelez India is below the 5-per-cent-mark, it is likely to touch the mid-way-mark in the coming months as the channel registers healthy growth. At the same time, Mondelez is backing its traditional trade partners, since proximity shopping has gained ground in the post-pandemic world.
 

The company is also expanding its rural distribution as growth remains higher in the hinterlands versus cities. The company covers 50,000 villages and is monitoring the consumption index in rural areas carefully to understand where growth is coming from.
 

Dalal says the preference for not only low-unit packs, but also higher price packs in rural areas has been growing, and the company is responding to this trend.
 

According to industry sources, the company reaches nearly 3 million outlets in the country, with direct reach at 1.5 million stores. While direct reach is higher in urban areas, Mondelez has been pushing direct reach into rural areas in recent years.