Mondelez Kinh Do seeks to continue leading snack market with ‘Make it right’ strategy

September 08, 2020 - 09:05

In July 2015, posting a major transaction to acquire Vietnam's biggest confectionery company, Kinh Do, Mondelēz International Inc of the US created a new entity, Mondelez Kinh Do Vietnam (Mondelez Kinh Do), for its operations in Viet Nam.

In July 2015, posting a major transaction to acquire Vietnam's biggest confectionery company, Kinh Do Binh Duong, Mondelēz International Inc of the US changed its name into Mondelez Kinh Do Vietnam (Mondelez Kinh Do), for its operations in Viet Nam.

Five years have passed since, and the company continues to be one of the biggest snack producers in the country with a portfolio of international and local brands known for their highest quality standards. 

By combining the strengths of a local organization with the highest standards of a global behemoth, the brands from Mondelēz Kinh Do portfolio have become the Vietnamese consumers go-to choices. The company's managing director, Hemant Rupani, talks about the achievements during these five years and its plans for the upcoming moon cakes range for its domestic and international customers this Mid-Autumn Festival.

This year Mondelez Kinh Do celebrates the 5th Anniversary. What do you see as the most significant accomplishments of your company during this period? 

In Viet Nam, Mondelez Kinh Do is committed to growing the business over the long term by offering consumers the right snacks made in the right way and on the right occasions.

Over the last five years, we have been the leading player in the snacking industry with outstanding performances in various categories. Independent sources show that Mondelez Kinh Do ranks first in terms of both value share and volume share based on Biscuits category (*) in Total Vietnam from July 2019 to June (**).

As an organization, we believe in doing what is right for our consumers, customers, colleagues, and communities, and we have significant accomplishments in this area. Last year our company was recognized as one of Vietnam’s top 10 food and beverage companies.

Mr. Hemant Rupani, Managing Director of Mondelez Kinh Do Vietnam

Another highlight is our Joy school programme meant to empower children to take positive steps towards overall well-being by promoting nutrition education, access to fresh food and support to active play. With this programme, Mondelez Kinh Do Vietnam has won for three consecutive years the CSR Amcham Award (2018, 2019, 2020) for best corporate social responsibility practices.

We are incredibly proud of our accomplishments in leading the market with our innovation and distribution. In five years, we have launched over 100 new products and packs in four snacking categories, including over 30 for exports. To ensure convenient delivery to Vietnamese families, Mondelez Kinh Do has been striving continuously to expand its distribution over the years. We currently cover over 300,000 traditional stores while being a valuable business partner of more than 6,000 new commercial outlets such as supermarkets and convenience stores.  

As an organization, we have also invested significantly in our manufacturing facilities. We have focused very hard on workers' safety, working conditions and the quality of products. Our Binh Duong and Hung Yen plants have been transformed into world-class manufacturing centres with automation and ISO international standards for product quality and safety. The factory in Hung Yen also has Class A Halal certification, to enable more exports.

What do you attribute to the company's success?

There are three main factors that we believe contribute to the company's success.

The first is continuing the heritage we acquired. We have retained all the desirable talent from the Kinh Do organization, brought in external expertise where needed, and have created brands and products deeply loved by our consumers. These strengths along with the high standards and expertise of Mondelez International have been a winning combination.

Secondly, we have developed a deep understanding of our consumers in Vietnam and how they want to consume snacking products, whether daily or during times of celebration. Our plans are rooted in these insights, and they contribute heavily to our innovation strategy.

The last and most important factor is our consumers, retailers and channel partners’ support, which has enabled us to add wings to our business and grow our employees. 

While bringing many international products to the Vietnamese market, Mondelez Kinh Do has also made much effort to develop Vietnamese products, moon cakes being one of them. The Mid-Autumn Festival is coming, so please tell us about the company's moon cake production and export plans.

With 22 years of experience in making mooncakes and serving consumers, Kinh Do mooncakes have become synonymous with Vietnamese consumers’ Mid-Autumn Festival. They chose our mooncakes for family moments and gifting. The Kinh Do brand is central to these special family moments. This Mid- Autumn Festival, we will delight consumers with the first-ever super-indulgent Black & Gold mooncakes, created with our trademark craftsmanship, packaged with love and care in some never seen before packaging.

 “Trang Vang Black & Gold” Moon cake, one of the new creations of Kinh Do, which offers a state of delight and is made with state of the art craftsmanship, receives very positive responses from consumers

For the first time this year, Vietnamese authorities have published mooncake-specific quality standards. I am super proud to share that all Mondelēz Kinh Do Mooncakes fully comply with these new and globally best standards. This enables us to continue to export our Kinh Do mooncakes for a 12th year to the US and the Oreo Mooncake to Singapore and Thailand.

Our marketing campaign for 2020 is 'Finely crafted mooncakes that keep your traditions alive’. This campaign focuses on the Mid-Autumn festival’s unique and special role in Vietnamese families. We proudly celebrate how the Mid-Autumn festival and Kinh Do mooncakes help bring families together and create traditions that are passed on through generations.

Launching breakthrough superior mooncakes and a robust supply chain with a commitment to superior quality and with an extensive distribution network, Mondelez Kinh Do is ready for another exciting mooncake season following years of successful growth.

Let’s talk about the snack industry in Viet Nam. How do you see it change during the last five years?

Viet Nam is a dynamic and rapidly developing market. According to the latest reports, the packaged food category, including biscuits and cakes, has increased its value dramatically over the past three years (***)

The current size of the snacking category (MAT May 2020) is already around US$1.135 billion, +5.7% value growth vs.YA, including biscuits, cake, snacks, and gum & candy (****).

Vietnamese consumers are willing to spend more on snacks, given the tendency to have many small meals and having more women in the working population. The snacks market is thriving and inviting more intense competition.

One crucial observation is that consumer interest in the traditional diet and nutrition seems to be thinning out. While the focus of many weight-conscious consumers tends to be almost entirely on calorie intake, attention is shifting to a more holistic approach to wellness-oriented food consumption. Consumers are becoming more mindful of how much they eat and what.

As a result, quick bites and beverages with better-for-you nutritional profiles are increasingly popular as meal replacements.

What is Mondelez International’s talent development strategy? And how does it fit the company’s goals globally and here in Vietnam? 

At Mondelez Kinh Do Vietnam, our talent development philosophy is “Grow people to grow business.”

We believe that local talent is a critical factor in our growth in Vietnam. Currently, local Vietnamese personnel is in most of our key management positions. HR is shaping Mondelez Kinh Do Vietnam’s future, driving excellent productivity, creating a great place to work, and developing world-class capabilities, helping each member of our staff learn, grow and improve daily. 

At Mondelez Kinh Do Vietnam, local talent is the critical success factor.

To keep our employees motivated and inspired, Mondelez has built a “Make it” package with four key pillars covering all aspects of work-life that involve our teams.

The first pillar is “Make it with pride.” It’s about the brands they love to work with and the pride associated with our local and global brands’ powerful mix.

The second pillar is “Make it possible.” We provide opportunities to test, and grow employees with the challenges of a young, ambitious and market-leading company. 

The employees of Mondelez together create a global impact, being global citizens who care and contribute to global sustainability. That is the key message of the third pillar, “Make it matter”. 

The last pillar is enabling individuality for each of our employees - “Make it uniquely yours”. They are encouraged to do their best and dare to be unique or different. 

In 2019 Mondelez Kinh Do Vietnam was listed among Vietnam's 100 best workplaces, ranking 45th in all industries and 13th in consumer goods (food and non-food).

How do you see the market in the next few years? In this context, in what ways do you expect to grow? Do you think your current leading position is secure and how do you plan to stay there? 

In a fast-moving market, consumer lifestyles, tastes, and trends change rapidly. As an organization, we must stay close to consumers to ensure that we can continue to be a meaningful part of their lives by serving their needs with our brands and products.

There are some key themes that we feel are important for the future. The urbanisation in Vietnam means people are leading busier lives with less time on their hands. Consumers are becoming more conscious of their health and well-being, and the snacking industry must be able to react to that and offer the consumers the right snacking options.

At Mondelēz Kinh Do, we are aggressively preparing for the future. We will continue to fulfil our mission to lead the snacking industry by promoting the right snacks for Vietnamese consumers with our evolved portfolio and mindful snacking approach. To meet the growing demands of Vietnamese consumers, we will extend our product innovation with a consumer-oriented approach driven by consumer insights.

Our strategy to do this is underpinned by our "Make it right" approach. We will focus on three 'RIGHTS': delivering RIGHT innovative products, leveraging RIGHT talent development strategies, and deploying the RIGHT initiatives to impact the community.

(*) Biscuits category includes any product that consists of ready-to-eat, shelf-stable manufactured food products. All products where basic ingredient is flour or wheat mixed with various other ingredients such as sugar, egg, salt, margarine etc., to form dough that is baked in the oven to be formed as a biscuit. These products have dry nature, imperishable, and may function as a snack or as a food supplement. This category includes Sweet Biscuits and Savory Biscuits.
(**) Source: Retail audit report in Total Vietnam (including Traditional Trade Off-Premise and Modern Trade, excluding MM Mega Market Vietnam & Semi-Retailer channels) in terms of value share and volume share of Biscuits category from Jul 2019 to Jun 2020.
(***) Source: Worldpanel Division, Households Panel, Urban 4 Key Cities & Rural Vietnam, Total FMCG excluding Gift, updated June 2020
(****) Source: Nielsen Retail Audit data ending May’20