ASEAN August 2019
Mondelez considers ASEAN as its growth engine for the next 10 years
A recent interview with Nikhil Rao, Regional Marketing Director for Southeast Asia, Mondelez International, unveiled interesting insights on the company's plan for the Southeast Asia market.
Nikhil said, "Globally, Mondelez has a vision of leading the future of snacking. Our purpose is to empower consumers to snack right. We want to be leaders that lead the growth and guide the future for snacking. The company aims to significantly grow the business in the AMEA (Asia Pacific, Middle East & Africa) region in the next 10 years from US$6 billion presently, and Southeast Asia is specifically highlighted as its growth engine."
Globally, Mondelez is a US$26 billion conglomerate; the Southeast Asia business contributes a fair share in Mondelez’s AMEA business in terms of revenue and is growing rapidly at a high single digit. Nikhil said, "We are essentially present in six categories with biscuits (cakes/baked products) being the largest segment followed by chocolates, gums, candies, beverages and meals (like cheese and mayonnaise). For beverages, specifically we focus on powdered beverages under the 'Tang' brand, and at present there are no plans to move to liquid beverages."
In Southeast Asia, Mondelez' star performers are biscuits and cakes, making them the second largest player in this category. According to Nikhil, "We are second in the market with 9% market share and first is Indonesia's PT Mayora Indah with slightly over 10% market share. The bakery segment in Southeast Asia is valued at US$5 billion and Indonesia alone contributes US$1.5 billion."
To keep up with the market competition, Mondelez has continuously innovated and launched new products in the ASEAN region. It recently introduced a new chocolate-coated Oreo, an effort made by Mondelez to bring two of its largest brands, Cadbury chocolate and Oreo cookies together. This exciting new product was recently launched in Singapore, Malaysia, Philippines and Thailand. Nikhil said, "Over the past two years, we have also launched multiple products from belVita biscuits to different flavours of Oreo. To reach out to the growing health-consciousness among consumers, we seek to lower their calorie consumption by introducing smaller portion sizes for Oreo as well as creating Oreo Thins, which is the same Oreo, with half the calories."
Mondelez is also sensitive to the regulatory requirements in each country in ASEAN. It has obtained Halal certification for its products in Indonesia and Malaysia to meet the needs of the majority Muslim consumers. In the Philippines, its products met the country's strict FDA standards.
Nikhil said biscuits and cakes represented 90% of Mondelez's Bakery portfolio in the region, but it also has a 'fresh' business in Vietnam, i.e. supplying fresh breads and cakes to retail, street vendors and cafes. Mondelez is also a market leader in supplying mooncakes in the country during the mid-autumn festival and "We have more than 50 flavours and SKUs for mooncakes. One interesting innovation we offered for mooncakes is the different Oreo flavours including chocolate and strawberry, among others." Consumers are eager to try out new flavours which are different from the traditional mooncake variants.
Nikhil has identified three major consumer trends for packaged snacks in the ASEAN region. One major trend is the move towards 'snackable health' i.e. where the lines between meals and snacking are blurred, and consumers are always busy and on-the-go, which make convenience 'snacking' their major source of nutrition. As a result, they are looking for healthier snacks which "do not damage their health or cause them to put on weight".
The next trend apparent in ASEAN is the growing preference for ethnic flavours as the region is home to many cultures, each with its own unique flavour. Local flavours like durian, salted eggs and pandan are growing in popularity, aside from traditional flavours like vanilla, chocolate and strawberry. ASEAN probably offers hundreds of unique flavours distinct from other regions. There is a huge potential in this area for creativity and innovations for Mondelez with regards to its packaged snack offerings. One such successful innovation is Cosy biscuits in coconut flavour and Solite Pandan cake in Vietnam.
There is also a growing trend towards premiumisation in ASEAN, and Mondelez has used the festive seasons to launch premium packaged/boxed gifts as a strategy which it just introduced 4-5 years ago to target large consumer purchases during festive seasons like Tet (in Vietnam), Chinese New Year, Hari Raya and Ramadhan. According to Nikhil, "The 'gifting' segment is growing very fast ahead of the standard categories."
Apart from 'gifting', consumers in Southeast Asia are also more willing to pay a premium for 'great taste' experience, added Nikhil. This is partly attributed to the growing disposable incomes in this region. "We have the benefit of having such great brands together to create more tastes and flavours, like the chocobakery sub-segment, a mixed product of chocolate and bakery like the chocolate-coated Oreo," added Nikhil. Mondelez aims to bring this new sub-segment forward to the market.



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