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Friday,  Nov 24,2017,03:23 (GMT+7)

Mondelez Kinh Do deepens its presence after M&A deal

Reported by Nguyet Tran
Friday,  Sep 1,2017,17:06 (GMT+7)
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Mondelez Kinh Do deepens its presence after M&A deal

Reported by Nguyet Tran

Two years after the acquisition of Kinh Do snack business, Mondelez finds the deal a game-changer as its products are now available across Vietnam. The company’s Vietnam-based factories are increasing their capacities to boost exports to ASEAN countries, China and Japan. Mondelez Kinh Do
Vietnam JSC’s Managing Director, Stephane Gripon, told the Weekly that Vietnam and other ASEAN countries are great places to invest into and the company is scoring a success as the Vietnam’s snack market is rising by double digits.

"In our first two years, we posted a growth of nearly two percentage points in our market share in Vietnam in biscuits and cakes. To keep the momentum, we will continue to make our business stronger and to expand our portfolio of local and international brands. Our aim is to become the best snacking company in Vietnam. That means growing our business, growing our people and growing our reputation and impact.
Stephane Gripon, Mondelez Kinh Do Vietnam JSC’s Managing Director

How did the Mondelez Kinh Do business grow after the acquisition? Does the progress meets your expectations?

- We see our business expanding beyond expectations thanks to the strong snack market growth rate. The snack category is growing faster than the GDP growth rate and the consumer goods growth rate. AC Nielsen retail audit reports that the biscuit and cake categories expand more than 10%. On top of that, Mondelez Kinh Do has gained share since we combined the two businesses. It shows together we are stronger.

Having a diverse portfolio of both local and global leading brands such as Kinh Do mooncakes and biscuits, Cosy, Solite, AFC, Oreo, Slide, Ritz, LU, Cadbury and Toblerone chocolate, we aim to accelerate the business by broadening our presence in Vietnam and other markets, including the ASEAN region, China and Japan.

How did Kinh Do brand help Mondelez develop in the local market, and vice versa?

- As Mondelez is a global corporation headquartered in the United States, our local operations exert an impact on Mondelez worldwide. Therefore, our first priority in the integration plan was to bolster our reputation as the best snacking food company ensuring superior quality and perfect food safety in line with Mondelez International standards. Our two factories have passed various internal audits with good rating and have world class safety and quality with ISO certification.

Before the deal, Kinh Do was already a very successful business with high quality products sold at affordable prices and an effective distribution system to serve the traditional trade. Acquiring such a great business, we combined the best of both: the distribution advantage of Kinh Do with the sales and marketing knowhow of Mondelez. It allows us to expand our business both in modern trade and general trade with the best portfolio in the industry.

Diverse product portfolio of Mondelez Kinh Do in the Vietnamese market

Could you elaborate on the total investment of Mondelez in Vietnam up to now, as well as its investment plan in coming years?

- After the acquisition of 80% of Kinh Do snack business for approximately US$370 million in July 2015, we acquired the 20% remaining part one year later. We also put additional investment to upgrade the factories to Mondelez International standards and to expand our capacity, including the new workshop in Hung Yen with the new Halal certified production line. The standards of the two factories have been significantly upgraded such as automation, control, quality and safety of workers. 

The two world-class factories in Binh Duong and Hung Yen are sufficient for our current operations. We will continue to increase both capacity and capability in those two sites.

Vietnam’s FMCG growth is now lower. Has it impacted your business?

- Due to changes in lifestyle and time pressure, people appreciate the convenience of snacks. It is growing faster than FMCG on average in Vietnam and the trend is here to stay.

Vietnam’s average biscuit and cake consumption is less than 2 kilograms per person a year, which is relatively low compared with the average consumption in some Asian and European countries. In Vietnam, consumption mainly peaks on Tet (Lunar New Year) holiday, especially for biscuit as a popular gift. Therefore, we still can grow the daily consumption with convenient and nutritional snacks that consumers can enjoy while having coffee, traveling or being at their workplace.

With our diverse product portfolio, we’re confident that our business will grow double digits due to Vietnam’s demography, population and changing lifestyle and its connection with other ASEAN markets.

New Oreo mooncake – the combination of Mondelēz International biggest brand and the know-how & experience of Kinh Do

Mooncake production is one of the most important business segments for confectionery companies in Vietnam. What have you planned for this year?

- As Kinh Do is famous in Vietnam as the leading brand of mooncake, so we continue to offer to local consumers the largest portfolio with the highest quality, and we keep innovating.

This year we launch innovative Oreo mooncake beside the traditional range to attract more consumers, especially the young generation. Oreo is Mondelēz International’s number one cookie in the world, and a well-known brand in Vietnam. Leveraging the know-how and experience of Kinh Do, Mondelez has developed delicious Oreo as a modern and western addition to the fantastic portfolio of traditional mooncakes. I believe that Oreo mooncake will surprise and delight families and kids for the mid-autumn.

We also export mooncake to China and the U.S.

How has your talent development strategy gone during the past two years?

- A key priority to becoming the best snacking company in Vietnam relates to developing our human resources: we want to build the best work force in the industry.

The career development of local talents is a top priority. We offer them what we call “the power of Big and Small,” the resources and the discipline of a global organization combined with the speed and agility of a local business.

Our employees can grow and contribute to the success of both our leading domestic and international brands. We also provide them career opportunities in other countries. In fact, we have promoted our first Vietnamese manager into a regional role after one year, and we will further accelerate the career development in Vietnam and oversea.

Could you share more about your company’s strategy orientation?

- In our first two years, we posted a growth of nearly two percentage points in our market share in Vietnam in biscuits and cakes. To keep the momentum, we will continue to make our business stronger and to expand our portfolio of local and international brands. Our aim is to become the best snacking company in Vietnam; that means growing our business, growing our people and growing our reputation and impact.

We want also to become the best partner of our customers to grow the category both in traditional trade and modern retail. Our products are currently available in more than 300,000 outlets across Vietnam but we can still reach many more.

We will continue to support our distributors and our retailers with strong programs to achieve this ambition.

Last but not least, we want to maximize our positive impact in local communities. We are setting up the foundations of a long-term business. Recently, we have announced our corporate social responsibility initiatives—the first Joy Schools in Vietnam that focus on enhancing nutritional habits and promoting active life style for primary students. 
 

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