• Submitted By: ayya1234
  • Date Submitted: 09/17/2014 7:02 AM
  • Category: Business
  • Words: 491
  • Page: 2

Global Chocolate Strategy

From October 1st 2012 Cadbury becomes a small part of Kraft’s new global snacks company, called ‘Mondelez’. Even though Mondelez chocolate sales will rival Mars as the world’s Number 1 (see bar chart), the company’s biggest sellers are biscuits, headed up by the $1bn ‘Oreo’ brand.
Bharat Puri, boss of the company’s chocolate category, believes he has a strategy to outstrip Mars. Puri’s plan is to focus on ‘four power brands, three priority markets and two innovation platforms’. The key brands are Cadbury Dairy Milk, Milka, Toblerone and Lacta (no, me neither, but it’s the market leading chocolate brand in Brazil); the two innovation platforms are bubbly and bite-sized; and the three main markets are India, Russia and Brazil.

Puri says that ‘developing markets will be the primary driver of our growth in chocolate’. In the short term Puri, former boss of Cadbury India, plans to foster growth through low unit pricing, e.g. small pack sizes. His long-term strategy is that: ‘by 2020, 110 million households in India, Russia and Brazil will move into the middle class and as they do, we believe they’ll step up their chocolate consumption by about three times’. The same logic can be applied to China, but Mars is the clear Number 1 in China with a 41% market share; Cadbury is implicitly accepting that it can’t catch up.
Mondelez has segmented the globe geographically into 3 segments: ‘Big Bet, New Wave and Scale’. India, Russia and Brazil are the Big Bets, accounting for 20% of global revenues. New Wavers (Indonesia, South Africa, China and Ukraine) generate just 4% of current Mondelez sales. Scale markets (UK, Australia, Canada, France and Germany) provide 42% of chocolate revenues at present.
The innovation breakthrough so far has been through bubbly chocolate. Mondelez says that the launch of Dairy Milk Bubbly has boosted UK market share by 4% by outselling Nestle’s Aero. Recent launches of Milka Bubbly in...

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