 "Mondelez cashes in on the 'Bubbly'")
Boy meets girl. To break the ice, he offers her a chocolate. She eats it and is charmed. The two go on to become good friends. The camaraderie between the protagonists in Mondelez's on-going ad for its new Cadbury Dairy Milk Silk Bubbly may not be unfamiliar to viewers, but the product certainly is.
Bubbly is an aerated chocolate - a puffed-up chocolate in other words - which is a product innovation that requires special technology given the sticky nature of chocolate. In Bubbly's case, the air bubbles are both inside and outside of it, hence the name.
Mondelez first introduced this format in the United Kingdom in 2012, following it up with launches in South Africa, Germany, Austria, France, Brazil and Russia. India has come now on its launch list, but that in no way means that the food major has no expectations from this market. It is hoping its latest launch here will add to Bubbly's global revenues, which stand at $200 million (or Rs 1,200 crore).
While Mondelez's India MD Chandramouli Venkatesan declined to indicate the sales numbers of Bubbly since launch two months ago, he does say that it has met with good response in the marketplace. "Innovation is the cornerstone of our growth strategy. And as the leaders in chocolates, we all the more consider it imperative to bring variations in product formats - to introduce innovations wherever possible. Bubbly is a step in that direction," he says.
Fast moving consumer goods (FMCG) analysts say that by launching the country's first aerated chocolate, Mondelez is also attempting to bring much needed spark into its India business, which has been reeling under a discretionary slowdown in the last few quarters. From double-digit growth a few years ago, the Rs 5,000-crore India business of Mondelez, saw single-digit growth in the March and June quarters of the current calendar year, prompting Irene Rosenfeld, Mondelez's global chairman & CEO, to take cognisance of it.
Venkatesan says that the slowdown seen here is short-term and that the long-term growth story remains intact. "Whether in-terms of growth in per-capita consumption of chocolates, an emerging middle class, changing rural infrastructure, which is integrating rural areas into the mainstream, the long-term potential of the market remains intact. These fundamentals of the India story and our position in the market here makes me feel excited about what we can do now and in the future," he said in a recent conversation.
Analysts say that the novelty of an aerated chocolate could get the cash registers ringing as the festive season sets in. In the last few years, Mondelez has done everything to improve consumption of chocolates in India. This has included pushing chocolates as a substitute to mithai (remember the campaign: Kuch Meetha Ho Jaye) to positioning them as a great way to make a new start (Shubh Aarambh) to creating festive and gift packs (Cadbury Celebrations) as well as creating occasions such as Friendship Day, Valentine's Day, Rakshabandhan and Diwali. In between, the company also found the time to push chocolates as a great way to celebrate simple occasions as espoused by Cadbury's earlier brand ambassador Amitabh Bachchan in the popular Pappu Pass Ho Gaya ad campaign a few years ago. In short, there is no stone that the chocolate maker has left untouched in its quest for growth.
While it has met with success, Mondelez remains the dominant player in chocolates with close to a 70 per cent market share. This has come against a backdrop of growing competition from newer entrants such as Ferrero, Mars and Lindt in the last few years. Ferrero and Mars, in particular, have been biting at Mondelez's heels in the mass market and Lindt at the upper end, say experts tracking the category.
The company is now investing heavily in rural areas. Some 20,000 villages in nine states have been identified, where it is adding visi-coolers and putting up a supply chain infrastructure to cater to these markets. The rationale is that rural consumers are as aspirational as their urban counterparts despite their limited budgets and if given a chance will try and take a shot at products that are easily available in the cities.
Whether innovations like Bubbly will cut ice in rural markets is something that Mondelez executives aren't ready to comment on (it is priced at Rs 70 and Rs 160 for different pack sizes); but they do say though that smaller pack sizes and lower price points of conventional offerings such as Cadbury Dairy Milk, Gems and 5Star do well in the rural areas. Venkatesan says that rural markets are clocking growth ahead of urban markets, prompting it to re-evaluate its go-to-market strategies for these regions. The firm now has special teams in place for the rural areas to promote specific products and price points.
