SINGAPORE: Mondelēz, the food and beverages giant, sees Asia as fundamental to its growth strategy, in part because of the technical expertise in the region, according to the company's APAC head of research and development.
Speaking to The Drum, Douglas Hughes outlined more of the company's thinking since its announcement last month that it will invest $65m to build a global research, development and quality (RDQ) network to make it more "flexible and agile" in responding to its growth and innovation requirements.
Mondelēz said at the time that it will focus its RDQ network at nine technical centres, including three in Asia – Jurong in Singapore, which is expected to open in November, Thane in India and Suzhou in China.
"We see APAC as a fundamental part of the growth engine, it's the region where we see most of our growth," Hughes explained. "Most of the world's population is here and there's a growing middle class with people looking to buy products."
But it is not just the size of Asia's markets that encourages Mondelēz to invest because the company is also attracted by the region's proven ability to innovate.
"You also have a huge amount of technical expertise coming out of the region. Some countries have education programmes, they want to invest in tech and we want to be part of that," Hughes said. "Tech innovation is a priority, as is giving our business stronger technical unity in our heartland markets."
By way of example, he pointed to Oreo Thins, a low calorie version of the Oreo snack that was developed in Asia before it was rolled out to the rest of the world.
Hughes said this illustrated the speed of scaling product innovation and of how Mondelēz is encouraging ideas to flow from East to West and back again.
When asked to elaborate on its choice of research centres in Asia, Hughes explained that India was already a technology centre, but the company realised that the growing popularity of chocolate in the country could allow it to centralise chocolate development there.
"This puts us in a unique position, not just in India, but for the entire Southeast Asian chocolate market," he said.
Centralisation was also a reason for picking the RDQ centre in Suzhou in China, while Singapore – the company's regional headquarters – offers strong education and cultural diversity.
"The way that the country focuses on innovation and drives it through education, we want to be a part of and support that," Hughes said.
Data sourced from The Drum, Mondelēz; additional content by Warc staff