Mondelez India, the country’s biggest confectionery maker, said there has been a strong volume growth in chocolate sales, bucking the slowdown trend in the overall market and indicating consumers could be turning to comfort food in a time of stress and inflation.
“We see a lot of growth being fired by double-digit volume, which is quite an exception given the kind of muted volume growth in the industry,” said Deepak Iyer, president at Mondelez India, which controls over two-thirds of the chocolates market.
“In case of severe lockdown, the one that will get rid of first is discretionary. But if you are talking about sad times, it’s a great comforting food. So I don’t think it is more recession or non-recession led. A lot of it is about how the business has been impacted, the reasons behind it and how chocolate or biscuits solve for it.”
The maker of Oreo and Bournvita attribute its sales surge to newer innovations across categories and distribution expansion especially in the hinterland, where historically they had a smaller presence.
As a result, rural now accounts for over a fifth of its overall sales, nearly double compared to 10-12% five years ago. With per capita consumption of chocolate around 140 grams per year in India while in the UK, it is over 10 kilos per year, the headroom is huge, said the company.
“It is super important for us to stay focused on consumption and consumption means volume. And we always look at three levers to pull levers to press. One is relevance of the brand. Second is the availability of the brand and third is the affordability of the brand,” said Iyer.