Products in low unit price are coming back strongly: Mondelez MD3 min read . Updated: 04 Aug 2020, 08:18 PM IST
Oreo trumps Dairy Milk as stuck-at-home Indians binge on cookies, says Deepak Iyer
Local arm of the packaged foods company Mondelez that sells popular Oreo cookies and Cadbury Dairy Milk chocolates in India, has seen an unexpected growth in its biscuits sales, while demand for chocolates and confectionery slumped as the lockdown hampered out of home or on-the-go consumption of such products. But 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 from an interview:
The festive season has kickstarted with Eid and Rakshabandhan. Can you gauge how the next few festive months will be?
This is one area where 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. And 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, a lot of them are watching their purse strings because of the financial insecurity that we have around this event. Third, it depends on how the pandemic itself will play out. If in the coming month this goes up (number of cases), authorities will have to step in and curtail mobility, which 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 finds a large skew towards out-of-home consumption—has the move to unlock helped revive the channel?
In the first lockdown, I think out-of-home was the channel that was the most severely hit and impulse purchase was almost zero. Hence it had a huge impact on consumption of categories like the colas, ice creams and out of home consumption of chocolates. Progressively, thereafter, it has become better.
Consumers after that initial phase of panic buying, started increasing their repertoire at home and then started looking for meetha (sweet) at home.
So one of the things that's emerged after one or two months of nesting at home, which is the kind of behaviour we saw among consumers—that with a lot of out-of-home consumption occasions going away, they 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 the mobility increases, I think categories which have products in the low unit price points are coming back very strongly.
What did better for you--chocolates or biscuits?
One thing that has worked throughout all the four months is biscuits. It is one of the highest penetrated categories at home. So for us, biscuits like any other biscuit brand, really worked wonderfully.
If I looked at Oreo, Bournvita and Cadbury Chocobakes as a portfolio, it fired very, very well for us all through the four months.
In this last quarter, we would have grown more than 50% in this portfolio—the three brands put together.
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 thanks 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 mithai-wallahs 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.