Cadbury maker bets on Asia to fuel chocolate demand recovery1 min read . Updated: 29 Jul 2020, 06:01 AM IST
- Mondelez expects the region’s consumption to return in the next six months to a year
- In the long term, Asia and its emerging markets will continue to drive chocolate consumption
Mondelez International Inc., owner of the Cadbury and Toblerone brands, is betting Asia’s resurgent chocolate demand will drive global growth after the pandemic wrecked consumption in the region.
The coronavirus had scuppered Asia’s surging demand as consumers staying at home stocked up on pantry staples and made fewer impulse purchases of items like chocolate. However, Mondelez expects the region’s consumption to return in the next six months to a year.
“In the long term, Asia and its emerging markets will continue to drive chocolate consumption," said Vikram Karwal, associate director of marketing chocolates for Southeast Asia at Mondelez. “It remains our fastest-growing market, with growth rates around double the global average."
Asia had been one of the top growth markets for chocolate producers, with the region’s growing affluence and changing lifestyles leading to a surge in cocoa grindings -- where beans are turned into products used in confectionery -- last year.
However, that demand came to an abrupt halt amid the pandemic, with Asia’s grindings slumping almost 6% in the second quarter.
In the nearer term, Asia will take some time to bounce back from the impact of the virus, Karwal said. That’s because chocolate is still seen as a treat for special occasions, as opposed to in Europe where it’s consumed more frequently, he said.
Mondelez isn’t alone in its optimism over Asia’s outlook. Cocoa-processing giant Barry Callebaut AG said there are encouraging signs that demand in the region is starting to improve, and raised its sales volume forecast slightly for the next three years.
The pandemic-led lockdowns are also changing the way consumers shop for chocolate in Asia, with more people now shifting to e-commerce to satisfy their snack cravings.
“We expect the usage of e-commerce platforms for food and grocery purchases or food delivery to remain robust," Karwal said. “Many people have gone digital during this period, and will continue to stay with the habit for its convenience."