Mondelez, a leading snacking company, has partnered with Belgian biscuit maker Lotus Bakeries to manufacture, sell, and market Biscoff, the latter’s flagship brand, in India.
Under the license agreement, the company responsible for Cadbury Dairy Milk and Oreo will receive royalties from its sales. This strategic move aims to expand India’s largest chocolate maker’s presence in the premium cookie segment within the INR 45,000 crore biscuit market, currently dominated by Britannia, Parle, and ITC.
Samir Jain, president of Mondelez India, described the partnership as mutually beneficial, where both companies recognize the value they bring to each other. “From Biscoff’s perspective, it marks our entry into India, leveraging Mondelez’s robust manufacturing, distribution, and branding capabilities. For us, it represents the introduction of a fantastic product,” he explained, noting that the rollout is scheduled for the second half of next year.
Biscoff: From Belgium to India
Founded in Belgium in 1932, the Lotus brand evolved over the decades. In 1986, its renowned Speculoos biscuit was rebranded as Lotus Biscoff, a blend of “biscuit” and “coffee.” Over the last decade, Lotus has seen a threefold increase in sales, driven by the overwhelming popularity of its spiced caramelized Biscoff, now ranked among the world’s top five biscuit brands. While the company has made initial strides in India, it sees substantial opportunities to tap into this expansive market, which boasts millions of retail outlets.
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Jan Boone, CEO of Lotus Bakeries, emphasized the importance of an extensive distribution network, a robust local presence, effective merchandising, and a suitable pricing strategy for successful operations in India. “We believe this is the opportune moment to accelerate the growth of Biscoff in this expanding market,” he stated. Expressing confidence in Mondelēz International, Boone highlighted their strong commercial expertise, market-specific knowledge, and local presence as ideal qualities to achieve their goal of making Biscoff a major success in India.
Manufacturing and Distribution Plans
Currently, Biscoff is predominantly imported into India and bears a substantial premium price tag, which could see a considerable reduction once Mondelez initiates local manufacturing. “Once we establish manufacturing facilities in India, we will be able to eliminate significant import duties. Therefore, the pricing will decrease significantly,” Jain explained.
Market Potential and Growth Opportunities
Internationally, Mondelez derives approximately 70% of its revenue from non-chocolate products like biscuits, gums, candies, and beverages. In India, however, chocolates constitute a significant portion of its sales. Over the last decade, the company has diversified into various categories such as cakes and breakfast cereals as part of its strategy to become a comprehensive snacking entity. Moreover, the biscuit category alone is nearly double the size of the chocolate and confectionery market, highlighting significant growth potential for Mondelez in the cookie segment.
Jain added, “With Oreo, we’ve shown our ability to establish a premium portfolio in this market, despite stiff competition. Although we entered the category later, our deep understanding of the consumer, coupled with a superior product and strong distribution network, enabled us to build a thriving business with Oreo.”
India ranks as the third-largest market for Oreo biscuits globally, following the US and China. Cadbury Dairy Milk holds the highest market share among all products of the US-based snacking firm in India. Last year, Mondelēz announced plans to invest Rs 4,000 crore in India over the next four years, primarily focusing on manufacturing and enhancing the supply chain to meet growing demand. The Indian operations contribute approximately $1.2 billion in revenue to Mondelēz, with its local unit commanding nearly two-thirds of the country’s chocolate market.
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While chocolate consumption per capita in India is around 200 grams annually, in the UK, it exceeds 10 kilograms per year, indicating significant growth potential. The company emphasized its intensified focus on distribution, boasting a direct reach to nearly 2.5 million retail shops thus far.
Apart from expanding Biscoff’s presence in India, the two companies will collaborate on creating and promoting co-branded chocolate products in global markets. Although specific product formats are in initial development phases, the first co-branded products are anticipated to debut in early 2025. These will feature Cadbury and Biscoff in the United Kingdom, and Milka and Biscoff in Europe.
Dirk Van de Put, Chair and CEO of Mondelez International, stated, “We look forward to working with Lotus Bakeries to expand the Biscoff brand in India, where it already has a loyal following among key consumer segments.” “This relationship will enable us accelerate our strategic focus on the cookies category by reaching a much bigger audience with a premium brand that is highly adored in many areas. throughout the meanwhile, we’re excited to collaborate on creating fresh, cutting-edge chocolate flavours and forms throughout Europe, which will bolster customers’ steadfast devotion to the recognisable brands of our two firms.”