People staying indoors, budget constraints, supply chain disruptions and slowdown in gifting are not best scenarios for businesses that thrive on festive occasions. However, Mondelez India — makers of Cadbury chocolates, Oreo biscuits and Bournvita health drinks — managed to turn all of this into an opportunity.

The company upped distribution (as Unlocking began) in favour of neighbourhood stores, rationalised portfolio, and worked on new gifting options. It ramped up the e-commerce play.

First of the festivities – Rakhi – tested the company’s strategies. Mondelez India saw “contactless gifting” pick-up; while kiranas found takers in the “new normal”.

According to Anil Viswanathan, Senior Director-Marketing (Chocolates), Insights and Analytics, Mondelez India, created specialised gift packs around its popular brands like Cadbury Dairy Milk, 5Star and so on.

“As the lockdown opened up, we got our supply chains in place. We knew the challenges modern trade was facing and worked on the neighbourhood stores and e-commerce presence. Rakhi sales and demand far exceeded our expectations; and the momentum sustained through Ganapati puja and Dussehra,” he told BusinessLine.

Global Accolades

The strategy drew accolades from parent Mondelēz International Inc. “India returned to grow with a high single-digit increase for the quarter driven by chocolate and significant biscuit growth; and the excellent execution of the team there,” the management said during its Q32020 (July-September) earnings call.

With “chocolates coming back” (reporting a 5 per cent growth in global turnover), Dirk Van de Put, Chairman and CEO, Mondelēz International Inc, said “chocolates came back in Q3…accelerated versus Q2, largely because of some of our emerging markets came back, like for instance, India.”

Portfolio Rejig

A major strategy that worked in favour of Mondelez India was the portfolio.

According to Viswanathan, the company quickly understood, premiumisation strategy would not be working out well in a “slowdown year”. It focused on the ‘core’, postponed some launches and went slow on some premium offerings. Popular brands like Cadbury Dairy Milk, Perk, 5Star and Gems (from the core portfolio) and Cadbury Dairy Milk Silk from the premium segment were pushed.

At the same time, it launched consumer-relevant snacking options like Limited Edition Cadbury Dairy Milk – Thank You Bar, Cadbury Chocobakes Choc Layered Cakes, Cadbury Choclairs Gold Coffee, Cadbury Bournvita Fills, Cadbury Dairy Milk Paanjeer & Cadbury Dairy Milk Hint O’ Mint.

Smaller SKUs or ₹ 10 price points were introduced in some of the premium categories as Mondelez India targeted new customer acquisitions. It widened portfolio offerings from ₹ 5 options to all the way up to ₹ 500.

“Wholesale is improving and our sales and supply chain are back on track. The portfolio rejig was required then. We have been investing in the premium space and will continue to do so,” he said adding that the premium segment will see growth come back towards the end of this year (December onwards). New offerings that the company had gone slow-on because of the lockdown were being reintroduced in markets steadily.

Diwali Play

Buoyed by the success, Mondelez India is now looking at a larger play during Diwali. Advertisement and promotion spends have jumped “in high double digits”, as the company “needed to invest to trigger back growth”.

Communication strategy has been tweaked to encourage “generosity” to the local retailers and consumers. Social media algorithms are being used to create a ‘Most Generous Ad’ that ensures consumers are “guided to their nearest local retailer, for their Diwali shopping needs.

“Corporate gifting remains on the slower lane. But individual or one-on-one gifting is picking up. Yes, year-on-year we are still lower than pre-Covid levels. But sentiments have definitely improved sequentially,” Viswanathan said.

Related Topics