Mondelez India hoping for a brighter Festive season

Mondelez India hoping for a brighter Festive season

Indian Market
by 5paisa Research Team Last Updated: 2022-09-22T15:57:27+05:30

Amid the consumer’s joy after 2 years of the pandemic-affected festive season, Cadbury makers are hoping for a brighter and more joyful festive season. Still, somewhere the Cadbury manufacturer fears the current inflation.

In a recent interview with Moneycontrol, Desmond D’souza, senior director of Mondelez India said that the company has witnessed a healthy start to the festive season with the gifting portfolio seeing an up move.

Cadbury’s festive season starts from Raksha Bandhan, earlier than the other companies where the festive season starts from Diwali. In India the festive season is particularly divided into 2 parts, first is between Raksha Bandhan to Onam (especially the month of Shravan) and Dussehra, Diwali in the next part. This festive season stretches from August till Mid-November during which the companies mainly focus on new product launches to gain consumer traction.

In the last 2 years, there was a low demand due to the pandemic, people were mostly in their homes and were unable to meet their relatives and their loved ones. Still, Mondelez India with its diversified portfolio gained volume-led growth. 

In FY2021, Mondelez India reported a CAGR growth of 11.3 percent. Currently, the company’s total revenue from its entire portfolio is $1 billion per year.

Inflation: The Biggest Threat

The macroeconomic environment and inflation have severely hit all industries. During the first two quarters, despite inflation, Mondelez India reported revenue growth which was led by volume. To date, the company witnessed a healthy start, and it should continue till Diwali.

In August, India’s retail inflation rose to 7 percent year-on-year and food inflation rose to 7.62 percent year-on-year.

How Mondelez India is Strategising?

Cadbury’s key strategy is to diversify into ‘adjacent’ categories of biscuits and cakes among others, to tackle stress on growth. At present, the company’s majority of the revenue is generated from chocolates Cadbury Dairy Milk leads 66% of the market share.

In the Biscuits category, Oreo is performing well. The company is now expanding into other segments with the Bournvita brand. The next focus Mondelez is focusing on candy i.e. on Choclairs. Recently, it launched the Cadbury lollipop and the company will focus on the expansion of snacking business.

The company will introduce more Indian flavors via the Cadbury brand. The innovative program known as Madbury was responsible for producing a ‘Paan’ flavored chocolate last year. In 2022, Cadbury Dairy milk crispy Rabdi and Crunchy Cola flavors were launched which gave consumers different varieties of chocolate.

At present, Mondelez India has almost 7 brands with manufacturing facilities in Maharashtra, Himachal Pradesh, Andhra Pradesh, and Madhya Pradesh. Currently, 80 percent of its business comes from traditional trade with 3 million stores.
 

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Investment/Trading is subject to market risk, past performance doesn’t guarantee future performance. The risk of trading/investment loss in securities markets can be substantial. Also, the above report is compiled from data available on public platforms.

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