The snack industry is booming, especially in the world’s developing markets, and the industry has taken note of that trend. Some of the industry’s leading businesses, including Mondelēz International, have decided to focus their efforts on expanding their operations in those markets.
The Big Picture
Some markets grow more quickly than others. Local economic conditions, consumer preferences, and a huge variety of other factors determine the conditions for each industry. Most large companies make a point of tracking those changes and investing in markets that show high growth and reasonable prices.
The conditions are ideal for the snack industry in many emerging markets. Mondelēz has seen significant growth among Chinese and Indian consumers, especially for chocolates and some biscuits. The Southeast Asian market has also grown, just like the markets of Mexico and Russia. South America is the exception to this trend, but there is still some growth.
Adapting to Local Cultures
While many of the consumers in those markets want to buy western brands, they also want products that suit their tastes. In some cases, that means creating new snacks. Those products tend to offer a blend of old and new traits. For example, they might take a traditional biscuit recipe and replace the flavorings with a blend that is popular in the target market.
It can also mean adjusting the marketing strategy. In areas that have a strong preference for digital commerce, such as China, companies need to offer their products over the Internet. They also need to tailor their advertisements to fit in with the local culture. Companies that manage to do so are more likely to connect with their audience and make sales.
Strategies for Expansion
Companies that want to take advantage of the potential for expansion have a few options. They can rely on traditional exports to send their products to local stores, but they can also open new factories or partner with local distributors.
Acquisitions are also an option. That has the advantage of expanding the company’s offerings with proven products and adds the possibility of using existing brands. Those acquisitions might involve full mergers, but some companies retain a great deal of independence to allow them to benefit from their unique business cultures and their connection to local consumers.