In-home snacking trend may help boost demand: Mondelez MD3 min read . Updated: 05 Aug 2020, 08:51 AM IST
In-home snacking trend is likely to help accelerate demand for its newly-launched choco bakery category comprising cookies and cakes
The local arm of packaged foods company Mondelez, which sells the popular Oreo cookies and Cadbury Dairy Milk chocolates in India, witnessed unexpected growth in biscuits sales, while demand for chocolates and confectionery slumped with the lockdown curbing out-of-home and on-the-go consumption of such products. In an interview, Deepak Iyer, managing director, Mondelez India, said in-home snacking trend is likely to help accelerate demand for its newly-launched choco bakery category comprising cookies and cakes. Edited excerpts:
With the start of the festive season, with Eid and Rakshabandhan, how will the next few months be?
We have to wait and see how this pans out. For Rakhi, we will know what the consumption has been only a week from now, because we sell the stocks two to three weeks before the festivity. Only when we go back to the stores a week from now, we’ll be getting to know exactly what the off-takes were.
But, when we checked with consumers, all of them are looking forward to the festive season. Equally, many are watching their purse strings because of the financial insecurity that we have around this event.
Third, it depends on how the pandemic will play out. If in the coming month, this (number of cases) goes up, authorities will have step in and curtail mobility, that will sort of impact the festive season. Nobody can predict what’s going to happen, but we still have to watch it week by week, month by month.
Confectionary has a skew towards out-of-home consumption. Will the unlock phases help revive the channel?
In the first lockdown, out-of-home was most severely hit and impulse purchase was almost zero. Hence, it had a huge impact on consumption of categories like colas, ice creams and out-of-home consumption of chocolates. Progressively, it has become better. After the initial phase of panic buying, consumers started increasing their repertoire at home and then started looking for meetha (sweet).
So, one thing that has emerged after one or two months of nesting at home, is that with a lot of out-of-home consumption occasions going away, consumers are now falling back on the comfort and reassurance that they get from occasional indulgence from their favourite go-to food (at home).
And even out-of-home, as mobility increases, categories which have products in the low-unit price points are coming back very strongly.
What did better—chocolates or biscuits?
Throughout all the four months, it was biscuits. It was one of the highest-penetrated categories at home. So, for us, biscuits like any other biscuit brand, worked wonderfully. Oreo, Bournvita and Cadbury Chocobakes as a portfolio, fired very, very well. In this last quarter, we would have grown more than 50% in this portfolio.
Chocolates, on the other hand, in the beginning when people prioritized their essentials, staples and groceries, obviously did take a backseat. But, after that, as we start coming back month on month, we have made steady progress. And for the month of June and July put together, we are back in a positive territory.
Are you looking at the biscuits and bakery market in a big way due to covid?
Yes, we are, in fact, we just launched cakes—Cadbury Chocobakes. So far, in the first month, despite all the constraints of lockdowns, we have sold-out all the quantities we planned to.
Did covid help you accelerate the launch?
We had to accelerate it by a quarter or so. What’s happening right now is, people are staying at home and they don’t have access to the same mithaiwallahs of the past. And even if they do, they are preferring packaged food. So, there was no better time to launch. So, we got R&D experts sitting in Bombay and I’m making this in a factory in Hyderabad, we had to do everything remotely. Configuration of the line, qualification of the product, guiding them, everything down to visuals, cameras, and people guiding them step by step from their homes.