Will there be room in India’s fiercely contested biscuit market for a new Oreo/Biscoff JV?

By Gill Hyslop

- Last updated on GMT

Mondelez and Lotus Bakeries are setting up to vye for a share of the Indian biscuit market. Pic: GettyImages/vasantytf
Mondelez and Lotus Bakeries are setting up to vye for a share of the Indian biscuit market. Pic: GettyImages/vasantytf

Related tags Mondelez International Lotus bakeries India Parle Products brand licensing market rigging Cocoa prices

India’s all-consuming love of biscuits lays the foundation for a new partnership between Mondelez International and Lotus Bakeries.

Parle, Britannia, Sunfeast and Haldiram are some of India’s biggest biscuit manufacturers, coined the ‘billionaire babies’ by Kantar’s Worldpanel 2024 Brand Footprint,​ which saw the leader (Parle) command eight million Consumer Reach Points – second only to Coca-Cola.

Consumer Reach Points are the number of times consumers chose the brand over the year.

It is within this fiercely contested market that Mondelez and Lotus Bakeries have set their sights to expand and grow the Lotus Biscoff cookie brand.

India is a key growth market for both companies.

Lotus Biscoff was first launched in India 15 years ago and today accounts for 0.2% of the company’s overall group sales revenue, which tipped the €1bn mark in 2023 to reach €1.06bn ($1.14bn).

The Belgium company currently produces supply for the Indian market at its plant in Lembeke, with distribution conducted through a local partner.

Meanwhile, Mondelez has been present in India for more than 75 years, running three production facilities to produce its well-known brands for the Asia, Middle East and Africa regions, which saw net revenue increased 4.6% last year to $7.08bn.

Last year, Mondelez India Foods Private Limited announced a Rs16bn ($191.5m) investment earmarked over three years to upgrade its Sri City manufacturing facility in the state of Andhra Pradesh.

Lotus bloom

Under a dual-pronged initiative, the US-headquartered snacking giant will manufacture, market and distribute Biscoff cookies – also known as Speculoos cookies in other regions – in India using its existing network.

lotus flower kool99

Lotus is the national flower of India, associated with the Hindu goddesses Lakshmi and Vishnu, which represent beauty, fertility, purity, prosperity and eternity. It blooms between April and September and in Hinduism and Buddhism, embody the journey to enlightenment and overcoming obstacles along the way.

“Lotus Bakeries aims to achieve significant visibility and sales growth in this high-potential market, while Mondelez will build upon its already strong presence in both traditional and modern trade to expand its cookie offerings into high-demand premium spaces,” said the duo in a joint statement.

“Mondelez will source locally but Lotus Bakeries will provide a secret ingredient mix to protect the Biscoff recipe. Other manufacturing IP is licensed out to guarantee Biscoff’s unique caramelised taste and unique crunchy texture.”

The partnership will also see the two companies developing new products that will combine the Biscoff taste and texture with some of Mondelez’s iconic chocolate brands. The co-branded products are destined for the UK (Cadbury and Biscoff) and Europe (Milka and Biscoff) next year, with an option to expand globally.

loud speaker solar 22

Brand licensing is big business and a “no brainer” for major food producers like Hostess Brands,​ Perfetti van Melle​ and Finsbury Food Group​ but also a chance for smaller bakery and snack producers “to expand their footprint into other sectors within the F&B space, as well as completely new arenas,”​ Amanda Cioletti, content director of License Global, told Bakery&Snacks in 2019.

Steven Ekstract, brand director of global licensing group UBM – which hosts Brand Licensing Europe (BLE) and similar tradeshows around the globe – added the $315.5bn licensing industry is a smart strategy for producers in the F&B space “to distinguish your product from every other product out there.”

According to Business Research Insights, the brand licensing market is projected to grow at A CAGR of 4.34% to reach $423bn by 2031.

“This partnership provides new opportunities for both companies to accelerate their growth ambitions in the attractive cookie and chocolate categories, with potential options to expand into additional markets and/or adjacent segments,” continued the statement.

“We look forward to partnering with Lotus Bakeries to expand the Biscoff brand in India, where it already has a loyal following among key consumer segments,” said Dirk Van de Put, Mondelez chairman and CEO.

“This partnership will help accelerate our strategic focus on the cookies category by introducing a premium brand that is widely loved in numerous markets to a much wider audience.”

Added Lotus Bakeries CEO Jan Boone, “We look forward to building on their [Mondelez’s] commercial expertise and market-specific knowledge and presence in India, and we believe now is the right time to expand our distribution in this growing market.

“Additionally, we are excited to add our Biscoff brand to one of the world’s leading chocolate companies.”

Lotus Bakeries is also a force within the natural snacking segment with brands like nakd, Trek, Bear, Kiddylicious, Peter's Yard, Dinosaurus, Peijnenburg and Annas.

The bittersweet notes of chocolate

In other news, Mondelez has promised to continue offering its treats at affordable prices, despite the sky-high cocoa price.

Cocoa prices have nearly tripled in value this year as droughts, inconsistent rainfall and crop disease in the world’s top cocoa producing regions – Ghana and Côte d'Ivoire – have created a massive global shortage.

The commodity currently forms around 10% of Mondelez’s cost-of-goods-sold (COGS), according to investment banking and capital market firm Jefferies.

However, the Oreo maker is banking on a turn for the better.

“My most probable scenario into next year is that costs will come down,” chief financial officer Luca Zaramella said.

“The name of the game for us is – particularly in a context where we believe chocolate costs will come down – to go through a potential temporary dislocation and protect volume and share as much as possible.”

Meanwhile, in May, a €337.5m ($366m) fine for alleged market rigging has compounded the snacking giant’s woes.

The European Commission accused the Oreo maker of hindering the cross-border trade of chocolate, biscuits and coffee products in the EU to maintain higher prices.

The investigation – which began in 2019 – revealed the US multinational had abused its dominant position, purportedly restricting supplies to prevent lower-priced products from entering higher-priced markets.

This is in breach of EU competition rules to create a more cohesive Single Market.

“This case is about the price of groceries. It’s a key concern to European citizens, especially in times of very high inflation and cost-of-living crises,” said Margrethe Vestager, EU competition chief.

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