Mondelez to invest USD100 million in chocolate production in China
August 22, 2016 Category Foreign investment, Weekly
Global snack leader Mondelez International is investing more than USD100 million in the next three years in China to produce and launch its new chocolate brand. Milka will hit shelves in China in September as Mondelez’s first chocolate brand in the country, with its taste and flavor adapted to local customers. Mondelez has spent four years preparing its Chinese products to stand out from its global chocolate brands portfolio, which include Cadbury Dairy Milk, Lacta and Toblerone, said Manu Anand, President of Chocolates Asia Pacific at Mondelez. He added that market research has shown Chinese consumers prefer Milka’s characteristics of quick-melting, rich chocolate and an Alpine milk taste. “Almost all Milka chocolate sold in China will be made in China with Alpine milk imported from Europe,” said Anand. According to Euromonitor International, Mars’ Dove brand tops chocolate market shares in China in 2016 at 26.2%, followed by Ferrero Group’s at 13.4% and Nestlé at 8.7%. Du Jiaqi, Research Manager of Euromonitor, said the chocolate category has had soft growth in China in the past year, falling 3% year-on-year. “Chocolate is an impulse purchase,” said Du. “The weakened gifting behavior combined with the impact of e-commerce, where consumers don’t notice chocolate like in a store display, has lowered consumption in the category.” However, China still has huge potential to grow the demand to match the level of Europe in terms of consumption per capita. Having operated in China for more than 30 years, Mondelez has had to deal with the issue of its aging brands by introducing fresh categories in the past several years, the China Daily reports.
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