 "Regulator-industry relations are a win-win partnership: Chandramouli Venkatesan")
Chandramouli Venkatesan, 47, took over as managing director (MD) of Mondelez India on January 1 this year. A consumer goods veteran, Venkatesan has been with Mondelez for a decade and has steered the company through a discretionary slowdown. In his first interview since taking over as MD, Venkatesan tells Viveat Susan Pinto how the festive season would be better this year than the last. Edited excerpts:
It has been nine months since you took over as the managing director of Mondelez India. How would you describe your journey?
The opportunity of leading a company of Mondelez's stature in one's home market is always a joy. For me, every morning has been about waking up with excitement and determination. The excitement is about the opportunity we have. The first is our position. We have an exceptionally strong position in the Indian marketplace in terms of brands, route-to-map, categories and people.
What are you doing to capitalise on this opportunity?
We continue to make investments in key areas such as manufacturing, distribution and supply chain. In the past few years, we have invested upwards of $200 million (Rs 1,200 crore) in the Indian market in these areas, besides investing in brand-building at a time when input costs have not been favourable to us. This is unlike most other FMCG (fast-moving consumer goods) companies, which have gained from the crude-linked basket seeing a slide in prices. To me, a slowdown is an opportunity to improve operating effectiveness; to ensure we get the bang for the buck, we invest; and to create stuff that is innovative and breakthrough, which creates the necessary buzz in the marketplace and gets us category growth.
You were the first to launch an aerated chocolate (Cadbury Silk Bubbly) in India. Can we expect more such innovations?
Innovation is the cornerstone of our growth strategy. We are getting enormous support from the global Mondelez team on innovation. Bubbly has been phenomenally received in India. It also exists in other markets. And yes, we continue to work in collaboration with the global R&D (research and development) team on product innovation. It is a key area for us. We also launched something called 'Home Treats' that aims to push in-home consumption of chocolates. There is more that you will see across categories.
You're also investing significantly in rural areas. What makes you confident that rural consumers will eat chocolates when there are regular sweets and desserts competing for attention?
This again boils down to the India opportunity I spoke of earlier. Rural consumers are aspirational and are looking to try out new options. If there is something available to them at the right price point, I don't see why they will not try that out. This is, in fact, showing up in our growth numbers. Rural is ahead of urban in terms of sales, which is why we now have a focused strategy in place for rural, targeting 20,000 villages in nine states. This should help us improve penetration.
After the Maggi ban, are you confident industry-regulator relations will improve?
Regulator-industry relations are a win-win partnership. As a leading food company, we are as worried about consumer safety as the regulator. I am hopeful the relations will improve.
The festive season is critical for you. Are you hopeful this year will be better than the previous?
My expectation is that this festive season would be better. What we have observed is that when Diwali falls in November, the period tends to be good for us. This is because we get a longer window in terms of the festive season. This has an impact on sales. Second, chocolate is an impulse category. If we do good marketing of our products, it again rubs off on sales. I feel very good about what we are doing this festive season. We have had some outstanding advertising on Celebrations (festive packs). We have Cadbury Glow, which will get into its second year (it was launched around this time last year). We will step up the momentum on that brand.
Cadbury 5 Star is being relaunched right now. Then, there is Bubbly. We are bringing a new innovation in Oreo called Roast Almond. We will have limited edition packs of this variant of Oreo in the marketplace. In other words, there are multiple things we are doing this festive, which should help us do well this season.
It has been nine months since you took over as the managing director of Mondelez India. How would you describe your journey?
The opportunity of leading a company of Mondelez's stature in one's home market is always a joy. For me, every morning has been about waking up with excitement and determination. The excitement is about the opportunity we have. The first is our position. We have an exceptionally strong position in the Indian marketplace in terms of brands, route-to-map, categories and people.
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Equally, we are believers in the India opportunity, despite the discretionary slowdown the market is currently witnessing. This is short-term. The long-term story remains intact - whether it is in terms of growth in per-capita consumption of chocolates, an emerging middle class, or changing rural infrastructure. The fundamentals of the India story and our position in the market here make me feel excited about what we can do now and in future.
What are you doing to capitalise on this opportunity?
We continue to make investments in key areas such as manufacturing, distribution and supply chain. In the past few years, we have invested upwards of $200 million (Rs 1,200 crore) in the Indian market in these areas, besides investing in brand-building at a time when input costs have not been favourable to us. This is unlike most other FMCG (fast-moving consumer goods) companies, which have gained from the crude-linked basket seeing a slide in prices. To me, a slowdown is an opportunity to improve operating effectiveness; to ensure we get the bang for the buck, we invest; and to create stuff that is innovative and breakthrough, which creates the necessary buzz in the marketplace and gets us category growth.
You were the first to launch an aerated chocolate (Cadbury Silk Bubbly) in India. Can we expect more such innovations?
Innovation is the cornerstone of our growth strategy. We are getting enormous support from the global Mondelez team on innovation. Bubbly has been phenomenally received in India. It also exists in other markets. And yes, we continue to work in collaboration with the global R&D (research and development) team on product innovation. It is a key area for us. We also launched something called 'Home Treats' that aims to push in-home consumption of chocolates. There is more that you will see across categories.
You're also investing significantly in rural areas. What makes you confident that rural consumers will eat chocolates when there are regular sweets and desserts competing for attention?
This again boils down to the India opportunity I spoke of earlier. Rural consumers are aspirational and are looking to try out new options. If there is something available to them at the right price point, I don't see why they will not try that out. This is, in fact, showing up in our growth numbers. Rural is ahead of urban in terms of sales, which is why we now have a focused strategy in place for rural, targeting 20,000 villages in nine states. This should help us improve penetration.
After the Maggi ban, are you confident industry-regulator relations will improve?
Regulator-industry relations are a win-win partnership. As a leading food company, we are as worried about consumer safety as the regulator. I am hopeful the relations will improve.
The festive season is critical for you. Are you hopeful this year will be better than the previous?
My expectation is that this festive season would be better. What we have observed is that when Diwali falls in November, the period tends to be good for us. This is because we get a longer window in terms of the festive season. This has an impact on sales. Second, chocolate is an impulse category. If we do good marketing of our products, it again rubs off on sales. I feel very good about what we are doing this festive season. We have had some outstanding advertising on Celebrations (festive packs). We have Cadbury Glow, which will get into its second year (it was launched around this time last year). We will step up the momentum on that brand.
Cadbury 5 Star is being relaunched right now. Then, there is Bubbly. We are bringing a new innovation in Oreo called Roast Almond. We will have limited edition packs of this variant of Oreo in the marketplace. In other words, there are multiple things we are doing this festive, which should help us do well this season.