Mondelez exclusive part II: Sustainability and affordability key for ASEAN snacking growth – Malaysia and Singapore MD
Narmeen Khan was appointed as the Mondelez’s Managing Director for its Malaysia and Singapore businesses in February 2022, and revealed localisation and digitisation as important priorities in her plans for the region in part I of this exclusive interview.
In addition to these, Khan also told us how the firm views sustainability and affordability as key criteria that need to be built into its snacking business in order to achieve sustainable growth.
“[We already know that] consumers today are aligning purchase decisions with their values and how they impact the people and planet,” she told FoodNavigator-Asia.
“There is evidence of this in our State of Snacking 2021 report, which found that 85% of global consumers either buy or would like to buy snacks from companies that are working to offset their environmental impact.
“[So in response to these demands], Mondelez is making our snacks more sustainably by using less energy and water, reducing the amount of waste generated, while using ingredients consumers know and trust [progressing] in line with our global Environment, Social and Governance goals.
“[The sustainability goals are the same to appeal to consumers in this region as well] - In Malaysia, our facilities in Shah Alam and Prai are in the process of being equipped with rooftop solar panels as part of our move towards using renewable energy sources - both sites have reported a combined reduction in water consumption by 18.6% and waste by 11.3% in 2021 over the previous year.”
Mondelez is also a founding member of the Malaysia Recycling Alliance (MAREA), which is committed to a collective industry-wide pledge to recycle a minimum 25% of members’ packaging volumes by 2025.
“Consumers are becoming more intentional about their purchase decisions [here] - They are making more effort to understand what and how they eat, while putting deeper consideration into how their snacking habits impact the world at large,” she said.
Alongside demands for sustainability are rising concerns over product affordability, particularly in markets like Malaysia which are very price sensitive.
Price hikes have been a major topic of discussion for food and beverage firms over the past few months, from Nestle to Carlsberg in Malaysia. Most of these firms have said that there are likely to be ‘unavoidable’ increases this year due to rising production costs, and sadly this is going to be the same for Mondelez here.
“Like many companies, we are experiencing inflation across markets, including in Malaysia and Singapore,” Khan said.
“This is due to the steep cost increase across the value chain, especially in commodities, logistics, and packaging [and] as this continues, retail prices for some of our products will go up in 2022.”
That said, she also stressed that the firm has made a strong effort to keep these impacts as minimal as possible, given the understanding that product affordability is very crucial to the local markets, and that no skimping on product quality will occur at any point of production.
“We have undertaken various steps to minimise the effects and ensure our products remain affordable with the same great quality - We are committed to creating snacks the right way by providing consumers with a wide range of snacks to choose from, making it easy for them to enjoy, and ensuring our products are sustainable for the environment,” she said.
Accessibility in Asia
The prominent rise of online shopping during the pandemic is no secret, and this has been the same in both Malaysia and Singapore – and Khan believes that these have already become habits that are not going to go away.
“Partly driven by the pandemic, there has also been a rise in bulk purchase through online platforms and delivery services for home-sharing and gifting, which is contributing to growth in snack purchases,” she added.
“These entrenched habits will continue even as people return a new normal – [Though] we do foresee an increase in outdoor and impulse consumption once people go out or move around again, when this happens home consumption trends will likely continue but the gap will reduce against outdoor consumption.”
Mondelez’s State of Snacking 2021 report also highlighted that consumers in Asia in particular see accessibility to snacks as a very important factor, with omnichannel snacking availability both online and offline being an ‘expectation’ for eight out of 10 consumers.
With both Singapore and Malaysia moving to an endemic strategy for handling COVID-19, Khan believes that the firm’s strong foundation will help it to weather all possible upcoming scenarios.
“We have a broad portfolio of delicious, high-quality and well-loved snacks that we are consistently increasing in accessibility and availability, at acceptable price points. These fundamentals combined with our strategies and values give me great confidence in our ability to continue accelerating our growth in Malaysia and Singapore,” she said.
“We look forward to an optimistic future as countries gradually ease restrictions and reopen international borders. These will have a positive impact on the overall consumption growth, supply chain recovery and our operational excellence.
“There is so much more to learn about the market dynamics, consumer habits and social progress of [both the Malaysia and Singapore markets]. I recognise there are many similarities between these two markets, but I believe there is certainly room to further customise our approach as we strengthen our connections with consumers in each country.”