Mondelez India (the erstwhile Cadbury India) has witnessed the Indian chocolate market grow consistently since the year 2000 making way for an expansion of its portfolio
Mondelez India (the erstwhile Cadbury India) has witnessed the Indian chocolate market grow consistently since the year 2000 making way for an expansion of its portfolio. Its global flavours entered India and product innovations sped up.
However, it also faced controversies, brand ambassadors were questioned and products, relaunched. Prashant Peres, director, marketing (chocolates), Mondelez India, speaks to BrandWagon’s Shinmin Bali about where the company stands now, its digital push, the ‘affordable premium’, competing with the Indian dessert platter (traditional sweets) and more.
How has the chocolates portfolio grown in the past few years for Mondelez?
Our portfolio has three segments — premium, mainstream and affordable. The premium end includes Cadbury Dairy Milk Silk, Bournville and Temptations. Mainstream includes Cadbury Dairy Milk, 5 Star and Cadbury Celebrations. Affordable includes Perk, Gems and Cadbury Shots.
As we go to smaller towns, the premium end does well. There is a great demand for it but only if delivered well and with consistent quality. Cadbury Dairy Milk Silk is urban. It moves down to tier 2, 3 towns as well. The percentage share of the market in those towns is very similar to what it is in many other parts of India. Cadbury Dairy Milk and 5 Star will remain mainstays of the portfolio. CDM as a masterbrand has exceeded 40% share (according to Nielsen). Smaller brands like Cadbury Perk play in a competitive segment. Within that segment, it is holding its own. Similarly, there is not that much of competition where Cadbury Gems is. It has seen some ups and downs but overall is holding its own.
In India, how are you building the brands on digital?
Digital is a broad space. We are probably among the higher percentage spenders on digital compared to many other mainstream FMCG categories. We usually pick and choose the brands that we spend on. But brands like Cadbury Bournville followed by Cadbury Silk will be leading. They will probably have highest percentage spends on digital of any scale FMCG brands. A brand like Cadbury 5 Star has done phenomenally well online. We have often made films and activation specific to digital for YouTube Comedy Hunt. We have moved Bournvita Quiz Contest completely online.
When we have had to, we have taken calls like that. Having said that, one must realise that for big mainstream brands like CDM, TV still plays a very important role. CDM spans a much wider consumption audience. You do lose out a lot if you spend much for very sharp targeting for a brand like this.
E-commerce and selling online is at a nascent space for all FMCG brands. It is even more nascent for a category like ours as it needs a certain amount of infrastructure so that the quality of products delivered is good.
What’s your strategy for the gifting category?
We have been very well entrenched in occasions such as Diwali and Rakhi and have slowly extended the number of occasions, whether traditional or new. The traditional ones are not on a pan-India scale yet, but we activate them every year.
We are looking at other possible Indian festivals we can activate at a certain scale.
We have realised that e-commerce may be a very good partnership to do this. Friendship Day, Valentine’s Day are one-day occasions so the gifting habit, as compared to the kind during Diwali, does not exist. You are not competing with traditional sweets there; you are competing with nothing and that’s a tougher habit to build. If you need to get that right, you need to find a proper model and e-commerce is an interesting option where you can fine-tune your targeting and maybe get into a space with a slightly different model.
So traditional sweets continue to be direct competition?
Traditional sweets will always have a space in our lives. What it offers is an idiom that chocolate is an alternative. People are starting to take to that thought really well. We are already considered fairly traditional now. I don’t think there are barriers to consider chocolates as a possible gift. People when gifting will also look for what’s great, what says more about them as a gifter and how great a quality is of the product and we tick all the boxes in that regard. We add a wonderful layer on the tradition.
How is the premium segment growing?
When you look at all the launches we have done in the premium end under Cadbury Dairy Milk Silk, they have done the best in the premium segment.
Any impulse food category will always see a lot of launches. Our success rate has been very good. We have got a very good innovation programme.
The days — when the premium products would be, say, 10% of the market and the bulk comprised mainstream and affordable — are gone. Markets are moving towards a fairly equal split of premium, mainstream and affordable, from a value point of view. This happens in all categories where the premium end has been leveraged well. Having said that, when we say premium, it doesn’t always mean luxury. Luxury is not something that has come into India in a big way where people would pay R400 or R500 for a slab of chocolate. We are talking about affordable premium.
What’s the scope for scalability in the premium segment?
Silk almost as a single brand in the premium space is actually bigger than some entire companies which entered the market at almost the same time.
We have already achieved scale and it will only get better. But that doesn’t happen with all brands. Cadbury Bournville is not at the scale at which Silk is, but we are aware of it. We haven’t set up infrastructure only for Cadbury Bournville, so we can manage that. We know it will be niche for some time but we also know that it will take off and we want to be ready when that moment comes.