Snacking firm Mondelez International said it will invest Rs 4000 crore in India over the next four year, largely into manufacturing and supply chain to fuel surging demand. The investment size is three times bigger than what they did over the past four years when the maker of Cadbury and Oreo spent Rs 1500 crore.
“India is a priority market for us, India and we continue to accelerate our investment. This investment will be in factories, warehousing, logistics, route to market such as cold chain, including rural markets,” Deepak Iyer, president-India at Mondelez International, told ET.
India accounts for about $1.4 billion of revenue for parent Mondelez with the local unit controlling nearly two-third of the country’s chocolate market. The company said the fresh investment until 2026 will not include brand and advertising spends. “This will actually help us really transform our manufacturing footprint by upgrading existing plants and also significantly putting up additional capacity and strengthening our route to market capabilities,” added Iyer.
Over the past few years, Mondelez has invested over $230 million mainly to set up a greenfield plant at Sri City, Andhra Pradesh and a global research, development and quality (RDQ) hub, at Thane, on the outskirts of Mumbai.
Last year, the company posted double-digit growth in sales, bucking the slowdown trend in the overall market. In fact, last July, Mondelez during an investor call said they could be selling much more in India if they had the capacity and have since added new production lines to cater to the growing demand.
According to Tofler, Mondelez posted a 16% jump in sales at Rs 9,296 crore during FY22, while net profit fell 2% to Rs 978 crore. While chocolates are synonymous with Cadbury in India, the company said it wants to be a snacking company instead of just being known as a chocolate maker.
“We are seeing significant momentum in our volume growth, driven by consumption of our categories both by increasing per capita consumption and driving penetration with newer consumers. We are very confident that that trajectory will continue,” said Iyer.
With per capita consumption of chocolate around 200 grams per year in India while in the UK, it is over 10 kilos per year, the headroom is huge. Rival Mars, world’s biggest chocolate maker, counts India as one of their fastest growing markets globally and has invested more than $200 million in its India operations.