Mondelez International upbeat on India despite cost pressures

MUMBAI: Mondelez International has said it will continue to expand distribution and retail presence in India as the country remains a key growth engine with more than 20% year-on-year revenue growth in the September quarter despite inflationary pressures and global slowdown.

"Of course, there is inflation driven by the conflict in the Middle East, and that is a concern with consumers, for instance in India. But overall, we feel good about the consumer in emerging markets at this stage," chief executive Dirk Van de Put told investors on Thursday.

The maker of Cadbury chocolates and Oreo biscuits added about 130,000 outlets in India during the third quarter ended September, as it pushes deeper into the country's fragmented retail market. It sees considerable headroom for further distribution expansion, alongside opportunities to increase the number of products stocked by existing retailers.


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Mondelez said its India business has outperformed broader market conditions, driven by its efforts to improve product availability. "The reason why those numbers are being delivered is because we pursue incremental distribution opportunities quite rigorously," chief operating officer Luca Zaramella said.

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He said the opportunity in India extended beyond adding new outlets to upgrading existing stores and increasing the number of products they stock. "Between the incremental points-of-sales, the upgrade that we have on the current universe, the fact that we can increase the number of items that are carried by those stores...I think the opportunity is quite sizeable," he said.

This comes amid growing cost pressures from higher freight, fuel and commodity prices amid the West Asia conflict.

Mondelez said it was absorbing the additional costs within its existing financial outlook. It also flagged rising costs in dairy, oil and packaging.