Cadbury Dairy Milk Maker Eyes India’s Hinterland To Expand Business

Mondelez India, the maker Cadbury Dairy Milk, plans to take its bouquet of confectionery to villages and remote places, as it looks for ways to coax consumers in the hinterland to indulge their sweet tooth.

Rural sales comprise nearly a fifth of the business for Mondelez India. The company will renew its focus on the distribution network and management of inventories, Prashant Peres, director marketing – chocolates at Mondelez India, told BloombergQuint in an interview.

In its 70 years of presence in the country, the U.S.-based company has grown to dominate the Rs 8,500-crore Indian chocolate market with a share of 65 percent. The Dairy Milk accounts for 41 percent of the pie, the highest market share it has anywhere in the world, said Peres.

“Strong double-digit growths in our markets, we see no reason why we won't be able to do that and India holds tremendous potential and we see that playing out over time,” said Peres.

In the 12 months leading to August 2017, the industry grew at 12.4 percent, according to data by Nielsen India.

Another factor that has prompted the company, which also produces Dairy Milk Silk Oreo, Cadbury Fuse, Cadbury Lickables and Monster Gems, to expand its reach is the spike in demand from rural areas, where the market is growing 1.5 times to 1.8 times that of cities and towns.

India continues to be a big growth market for Mondelez International, said Peres. Mondelez has also tapped the e-commerce platform and has joined hands with Amazon India to sell its products online.

Peres said he doesn't expect any big movements in the industry after the Goods and Services Tax as nearly 95 percent of it is organised. The shift from unbranded chocolates to branded chocolates is likely to be “relatively small”, he said.