Chocolate and snacks major Mondelez, best known for brands such as Cadbury and Oreo, saw the India market deliver its fourth straight quarter of double-digit revenue growth, company’s global Chairman and Chief Executive Officer Dirk Van de Put said on Thursday.
Addressing investors during a concall following announcement of its second-quarter results, Van de Put said revenue growth in India was supported by strong underlying volume growth in chocolates, new innovations and a greater distribution push into traditional trade. The company follows a January to December accounting year.
India and China, Van de Put said, were the bright spots for Mondelez in the Asia, Middle East & Africa (AMEA) region, driving net revenue growth of 1.7 per cent in the April-June period. “This strength was tempered by a weaker Ramadan season, however, in the Middle East and softer results in Australia,” Van de Put said.
Van de Put comments came in response to questions about AMEA's overall performance in the second quarter versus other regions. While the Jan-March period saw AMEA behind only Europe in terms of net revenue growth, in the April-June period, it was the last, behind regions such as North America, Latin America and Europe.
In the second quarter, North America saw the highest net revenue growth of 5.7 per cent, followed by Latin America at 3.8 per cent, despite the latter seeing a pronounced truckers strike in Brazil in the April-June period. Europe, which is Mondelez’s largest market, saw net revenue growth of 2.8 per cent in the second quarter, led by markets such as Germany and Russia, which grew in double digits in biscuits and chocolates.
According to analysts, Mondelez derives around 40 per cent of its global revenue from Europe, followed by 30 per cent from AMEA, 20 per cent from North America and 10 per cent from Latin America.
India, in particular, said Van de Put, showed double-digit growth in chocolates, driving market share gains in the category. “Our market leadership was underscored by strong execution (of initiatives and launches) during the quarter. And the overall volume-driven growth (in India) was good,” he said.
India, besides Russia and China, were the few markets that saw strong volume-driven growth in the second quarter, he said.
Mondelez, for the record, is India’s largest chocolate-maker with two-thirds of the Rs 80-billion market under its belt. In recent years, the company has faced stiff competition from players such as Ferrero, Mars, Hershey's and Nestle, who have all upped the ante in Asia's third-largest economy.
Sector experts said Mondelez was expected to continue its aggressive push into traditional trade as well as rural areas in the coming quarters in India. The move coming when the market has recovered from disruptions caused by demonetisation and introduction of the goods and services tax (GST) and is also seeing a good monsoon spell for the third year in a row.