How is Mondelez Kinh Do’s business in Viet Nam four years after it came to the country? How has its growth been since the acquisition of Kinh Do and what is its contribution to the parent’s regional business?
This July, Mondelez Kinh Do completed four years since Mondelēz International took over the Kinh Do confectionery business and owns famous local brands such as Kinh Do mooncakes with THU and TRANG VANG variants, KINH DO buns, SOLITE, COSY and AFC. Mondelez Kinh Do Vietnam Joint Stock Company is the only authorized user of such brands in Vietnam for years to come. Our purpose is to Empower people to snack right.
In the first few years, we were focused on integrating the two companies, our internal processes and standards. Then, we did a lot of investment in manufacturing facilities especially in the areas of workers safety, food safety and working conditions. About US$10 million have already been invested on these kinds of initiatives.
In the next phase, we focused more on products by upgrading quality and marrying the things like the art of making mooncakes which is unique to Kinh Do with expertise of Mondelez in branding. We also focused heavily on our employees, and as a result of that, we were named among Vietnam’s top 100 best place to work for and were ranked 45th across all industries, and 13th in FMCG companies.
We have added many new categories into our portfolio like Chocolates, Gum and Candy and brought in globally loved brands like Oreo, Ritz, LU, Slide, Cadbury, Toblerone, Halls, Trident, Tang etc. We have successfully introduced nearly 80 new products into the market in the last four years.
We have also focused hard in readying our manufacturing facilities in Viet Nam for selling beyond the country’s boundaries. As a result, today our plants produce for 16 different countries
As a part of the South East Asia business unit, we are meant to deliver growth for the global organization. Not only have we been able to grow the business that we acquired, we have also been able to add more thru all the new categories and brands that we introduced to the market.
Becoming Managing Director of the company after successful stints in other markets including India. Please tell us why you decided to come to Viet Nam?
During the discussion between me and the company, I was very clear about two things:
First, I did not want to go to a market which was very small or had little to offer. Vietnam with is fast developing economy and highly capable people came across as a wonderful place to bet at. Secondly, what really attracted me to Vietnam was a very holistic portfolio for Mondelez: Breads, Cakes, Biscuits, Chocolate, Gum, Candy, Powdered Beverages all with different shelf lives and consumer dynamics. I see Vietnam as a very exciting place to be in.
As I said SEA is meant to be the growth engine for the world. The challenge in most emerging markets is that there will be years which would be great, and there will be years which will be soft. Hence, the first task that I put forth for myself is how to build the business in a manner that it can grow consistently at a sustainable rate.
For me, when talking about Sustainable Growth, it goes beyond just the numbers. Sustainability plays a role across Environment, Consumers and Brands. We already have several initiatives in that regard. For example in water conservation, in the last three to four years, we have reduced water consumption almost by a third compared to what we used to consume earlier on a comparable basis.
In addition, People impact is an important goal for me. All of this is hollow if it does not translate to growth for our people, so it’s important that not just the business but people who run business also grow with it.
What are your plans for Mondelez Kinh Do Vietnam?
In April, we put together our Strategy Plan for the next 3-4 years. Here we covered exciting opportunities in our portfolio and also white spaces where we can meaningfully have a snacking play. The new opportunities will not be completely unrelated ones but will be the ones where our brands can stretch into. We also closely watch how consumers respond to the products that are exported into the 16 countries and we would want to build on that.
We are very proud of our people – they come high quality, are talented and committed. Hence, the Vietnam market opportunity and available talent makes a very powerful combination to be able to do big things here.
We see that rural Viet Nam is not very well served. Therefore, we will be working on route-to-market models that serve rural Viet Nam well.
In terms of growing our business, we will be working towards expanding our distribution and focus on innovation opportunities across the portfolio. We believe that businesses cannot be built or sustained unless people grow with it. With that in mind, we have strong programs that work towards developing our people.
As a corporate we also have a responsibility towards the community that we live in. Through a program called Joy Schools, we help improve the well-being of Vietnam’s younger generations by providing nutrition-related knowledge to more than 4,000 kids across the country each year.
How do you see the potential of the Vietnamese confectionary market and FMCG market in general? How does Viet Nam compare with other markets you have worked in?
Thanks to the policies and encouragement that the Government gives to the manufacturers, the country is doing really well. That’s why consumers are also becoming more affluent, leading to an aspiration for better quality products, more branded and packaged products. This is where the FMCG and confectionary world benefits.
Additionally, number of women in workforce is a very big driving force in Vietnamese market. That leads to snacking as a rising behavior. Working mothers also need products and brands that they can feel comfortable giving to their children whether it is in school lunchboxes or after-school snacks. And these are very important consumer needs that we try to fulfill.
Mooncake has been a key product of your company for many years. Please tell about the mooncake production strategy this year?
This year, we are serving 83 different options in mooncakes, which include sugarfree options that are friendly to diabetic people. In addition, we are making all the paper bags that carry mooncake packs from recyclable and reusable materials. This is in line with our global commitment to make 100% of our packaging recyclable by year 2025.
In terms of product quality and safety, we make sure that all our packs clearly carry the manufacturing date and expiry date. If there is any unsold stock that is not worthy for consumers, we have a process to pull them out well in time. We distribute mooncakes through 12,000 kiosks across the country; therefore, managing those kiosks and making sure the hygiene & food safety standards are right warrants a lot of attention and energy from us.
We have Kinh Do mooncakes exported to the US and Oreo mooncakes exported to Singapore and Thailand. The continued export to US market over the past 11 years proves that our mooncakes are favored by not only Vietnamese but also Chinese, Malaysian, and Singaporean people who are living in the US. We believe that Kinh Do mooncakes are not only a delicacy, but also a reminder of our traditions for the Asian community in the US.