Mondelez India takes on biscuit rivals, targets mass market segment

Eyeing a bigger bite, Mondelez India has 1.6% of the biscuit market in India, according to industry estimates

With the chocolate market secure in its pocket, Mondelez India is aiming to take a bigger bite of the estimated $5 billion (around Rs 35,000 crore) biscuit market in the country. The company’s strategy rests on two pillars — one, push Oreo as a popular option in the premium end of the market and two, make two-year old Bournvita biscuits and its recently launched variant Bournvita Shakti, snacking choices in the mass market segment.
 
It is not uncommon for mass players to climb the ladder of aspiration and hope to be bracketed with premium products; but Mondelez India is happy to go top down. It started out with a premium offering in 2011 and after building up Oreo to be reckoned among the top three brands, the company has decided to have a go at the mass market. “There are legacy players who are 100 years old, 70 years old. Given that, what we have achieved with Oreo in eight years is phenomenal,” says Sudhanshu Nagpal, category lead 1(biscuits), Mondelez India. India is now the 5th largest market for Oreo globally and one of the fastest growing. Overall, Mondelez India has 1.6 per cent of the biscuit market in India, according to industry estimates.

Expect a lot more action around Oreo in terms of formats and targetting as the brand goes beyond wooing kids. The company is planning a tie-up with Hindustan Unilever to extend Oreo into ice creams. The brand has been extended into the choco-bakery segment under the biscuit category with the launch of Oreo Dipped at a price of Rs 20 for a unit pack (Rs 60 for a multi-pack meant for modern trade). Choco-bakery is a cross between biscuits and chocolates, which the company claims is a new trend. This would be a third platform for the brand to operate on. As an advertising professional, who has worked with a rival brand, points out, biscuits are moving away from the narrow hunger-satiation proposition and looking for a play in the larger indulgence and treats space.
 
“So, it’s not about biscuits or chocolates, it’s about giving the consumers the right dose of gratification and that’s the space where this segment is growing,” he adds. The company has been tracking the online response to Oreo Dipped since its launch in December 2018 to get a perspective on the brand’s potential. Within the first three days of the brand’s preview, it logged 4,000 reviews on Flipkart, of which 3,600 were five stars. “That’s not the kind of response Flipkart has ever got on a new launch in the foods category. So we got lot of consumer positive love,” claims Nagpal.
 
While these products are aimed largely at the customer in a metro or a tier-I city, in the coming months the company will turn its attention to the mass market, which accounts nearly 50 per cent of the biscuit sales in India, with Bournvita Shakti. “We will accelerate premium with the right intervention on Oreo and Bournvita and apply some of those lessons to take Bournvita Shakti mainstream,” says Nagpal.

“There are legacy players who are 70-100 years old. Given that, what we have achieved with Oreo in eight years is phenomenal,” Sudhanshu Nagpal, Category lead (biscuits), Mondelez India

 
If it were to do that, Mondelez will have to turn its attention to a market that has been its blind spot — the rural market ‘where so far Mondelez had a weak play’, agrees Nagpal. The company launched the Rs 5 pack in January. It also has Rs 10 and Rs 25 packs and a large “tiffin” pack for sales through modern trade. “We never had a Rs 5 biscuit, which is a price point that constitutes about 50 per cent of the biscuit market today. In rural exclusively, it’s even higher. So that’s where we decided that we would have a Bournvita Shakti which would talk of the same value, health and taste promise but offer better value,” he said.
 
Major companies operating in the biscuit market of India are ITC Limited, Britannia Industries Limited, Parle Biscuits Private Limited, Surya Food & Agro Limited and Unibic Foods India Private Limited. The organised biscuit market accounts for more than 70 per cent of value share in the overall Indian biscuit market. The sector is expected to surpass the revenue figure of Rs 400 billion by 2023. In the biscuit segment, Mondelez India is competing with the likes of Britannia and Parle.
 
The brand will see more investments in terms of marketing, strong sales efforts, addition of outlets, and in creating more in-store visibility. It is present in nearly 480,000 rural outlets and 884,000 urban ones. “In our trade visits, we have seen lot of excitement,” says Nagpal.
 
With all these developments, the biscuits category, which was growing at 2X of Mondelez India overall for the past few quarters, expects to continue the dream run for the next couple of years or so.