CONFECTIONERY INDUSTRY

By:P. KeerthiI. Siva Rama Krishna

HISTORY

 CavemenFirst chocolate factory in the United States was established in 1765.Ancient Olmec civilizations of Mexico made the first chocolate drink.Cocoa powder was made in 1828 .David Peter and Henry Nestle from Switzerland created the first milk chocolate in 1876.George Smith invented the first Lolly Pop in 1908.

PRODUCTS UNDER CONFECTIONERY

Chocolates

Candies

Cakes

Ice creams

Bakery products

DRIVERS

Growing gift culture

Rapid urbanization

Growing retail market

Growing income & consumption

Developing rural sector

Marketing campaigns

T O P 1 0 C O N F E C T I O N E R Y C O M P A N I E S I N I N D I A 2 0 1 6

Cadbury India Ltd. - A big multinational confectionery company.  It has Consumers in approx. 165 countries across the globe. Treated as number 1 brand in Biscuits, chocolates and CandyNet Revenue - $34 billion, Founded- 1849, Number of Employees – 5000

Lotte India Co. Ltd. – It is a multinational firm with headquarters based in South Korea and Japan.  It runs with a vision of being number 1 confectionery company in Asia by 2018. Net Revenue –$ 28 billion, Founded- 1948, Number of Employees – 6000+.

Nestle India Ltd. – The Company is among the leading confectionery company, being a merger of Anglo- Swiss- Company formed in 1905.  It is the largest food company in the world with 447 factories, operates in 194 countries. Net Revenue –$ US 497 million, Founded- 1866, Number of Employees – 10001+

Candico India Ltd. – The company started its operations in 1997 with the badge of one of the largest confectionery companies in India. It operates in 19 countries with an estimated annual turnover of US$ 2 trillion. Net Revenue – US$50 Million, Founded- 1997,     Number of Employees – 1000+

Lotus Chocolate Company Ltd. – The food processing unit deals in cocoa processing and a chocolate manufacturing plant. Since 2008, Lotus Chocolate Company Limited is an Indian owned entity. Net Revenue – Rs. 15.12 Cr, Founded- 1992,   Number of Employees – 500+

Campco Ltd. - Central Arecanut and Cocoa Marketing and Processing Co-operative Limited (CAMPCO) was introduced in Mangalore in July 1973. Net Revenue – Rs. 41.6 Cr, Founded- 1973,   Number of Employees – 400

Candi co India - Candico began its operations in the year 1997.  Net Revenue – Rs. 10- 100 Cr, Founded- 1997,   Number of Employees – 500.

Sampre Nutrition is counted among the top 10 confectionery companies of India and has been manufacturing quality products that include éclairs, candies, toffees, powder etc.

Wrigley India is a global confectionery company that has production unit in India.

Perfetti Van Melle India Pvt. Ltd is another prominent confectionery company that has global presence. Most sold products of the company are Alpenliebe Creamfills, Alpenliebe POP, Centre Fruit, Happydent White, Protex Happydent, Marbels, Mentos, etc.,

REVENUES OF TOP COMPANIES IN INDIA

$0$10,000$20,000$30,000$40,000

0

200

400

600

very high revenuenormal revenue

MARKETING STRATEGIES

India has got more than 50% of its population below the age of 25 & more than 65% below the age of 35.

0%10%20%30%40%

population

population

Separate plan for each age group.

0-18 yrs. – 50% studying in schools.

19-35 yrs. – active on social media

36-65 yrs. – working population

Confectionery industry can also be classified in terms of different product categories.

GLOBAL SEGMENTATION

In India, Southern India accounts for the majority share of confectionery consumption.

Region wise sales of confectionery (2015)

Structure – wise segmentation (2015)

Region – wise segmentation (2015)

After successfully capturing urban markets, the players are now keento establish a foothold in rural India.

MARKET GROWTH RATES OF SUGAR CONFECTIONERY

1990-91 - 1996-

97

1996-97 - 2001-

02

2001-02 - 2006-

07

2004-05 - 2009-

10

2009-10 - 2014-

15

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

ADVERTISING IN CONFECTIONARY INDUSTRY

The only way to create brand salience is through innovative advertising.

Large confectioneries spend 12 to 13 per cent of their sale revenue on advertising and brand promotion.

Advertisements need to appeal to all consumers across age brackets and socio – economic groups.

TARGETING ADULTS

Traditionally, the confectionery companies considered only children

as their target market and confectionaries advertisements were also

always targeted at children.

But stagnancy in he growth rates made the companies rethink their

strategies.

Cadbury was the first company that repositioned its brands for

adults.

HISTORY OF CADBURYStarted by John Cadbury

Factory in Bourneville in 1861- chocolate production in U.K

1897-Manufactured 1st milk chocolate.

1950- First overseas factory near Hobart, Tasmania

CADBURY INDIA In India, Cadbury began its operations in 1948 by importing chocolates.

It today has 5 company-owned manufacturing facilities & 5 sales offices in 5 metros. The corporate office is in Mumbai.

Cadbury enjoys a value market share of over 70% - the highest Cadbury brand share in the world!

Cadbury Dairy Milk is considered the "gold standard" for chocolates in India.

OBJECTIVESTo become the World’s Biggest and Best Confectionery Company.

To make lots of chocolate & improve the quality of their chocolate.

Have loads of stores worldwide.

To be an ongoing company & achieve revenue growth of 20% per

year.

Increase earnings by 15% annually & dividends per share by 7% per

year.

ACHIEVEMENTS2008- SILVER award for the 'Most Effective Use of Advertising‘.

2008- Cadbury India has been ranked as the 7th Great Place to Work and the No. 1 FMCG company in India.

Cadbury Dairy Milk & Bournvita have been declared a `Consumer Super brand' for 2006-07.

Cadbury India has been ranked 5th in the FMCG sector, by Business World magazine in 2007.

MARKETING MIX4P’S

PLACE

Produced at the chocolate factory in Bourneville in Birmingham.

It is then transported to the stockrooms.

After this Cadbury sells it products to shops

that deal with beverages and confectionery e.g. corner shops, superstores.

They then sell it to the general public.

Five company-owned manufacturing facilities:

Thane

Induri (Pune)

Malanpur (Gwalior)

Bangalore

Baddi (Himachal Pradesh)

4 sales offices: New Delhi

Mumbai(h.q)

Kolkota

Chennai

THESE FACTORIES CHURN

OUT CLOSE TO

8,000 TONNES

OF CHOCOLAT

E

PRODUCTCadbury Dairy Milk is made from Real Chocolate

Its ingredients include cocoa butter

There is a glass and half full cream dairy milk in every 200

grams of Cadbury dairy milk chocolate

Cadbury buys 65 million liters of fresh milk each year to make

Cadbury dairy milk chocolate

PRODUCT Bars

Cakes &Biscuits

Drinks

Ice Creams &

Desserts

PRICEAdopted competitive pricing

strategy for the basic product

Whereas premium pricing on

other variants

Cut down on weight but did not

increase cost

e.g. 5 Rs pack was of

13gm but now it is 10.5gm

PROMOTION

The media mix for any campaign for diary milk comprises of TV, radio, print, OOH and Internet

The advertisements are used to create an emotional bonding with the consumers

The promotions increase brand loyalty, encourage repeat purchases and at the same time increase market share

Cadbury spends approximately 45 crore on advertising.

SHUBH AARAMBH

KUCH MEETHA HO JAAYETried to relate to the consumers culturally by positioning it as a sweet. All the ads are based on a joint family thus relating to India culturally.

 "The obvious part of the communication is the self-indulgent product and the irresistibility of it

MARKET SEGMENTATION

Geographic segment

Demographic segment

Behavioral segment

Psychographic segment

MARKET SEGMENTATION

GEOGRAPHICRegion

Countries

Climate

DEMOGRAPHIC

Age

Gender

Family Life cycle

Income

MARKET SEGMENTATIONPSYCHOLOGICAL

Attitude Toward The Product

Life Style

BEHAVIORAL

Occasions

Benefits

Usage rate

SWOT

STRENGTHS

World leader -200 CONTRIES

Powerhouse brands and Products- dairy milk, Bournvita, oreo, &five star.

-some are cash cows for Cadbury.

 Brand name, brand equity and Brand loyalty-

-strong branding over the years

- the brand equity of high.

-comfortable charging a premium product because high brand equity.

Positioning as gift.- CELEBRATIONSPromotions-“kuch meetha ho jaye” -  excellent brand recall.

Indian connect –emotional marketing .

Placement and distribution –one of the best FMCG 

WEAKNESSES 

few cases-found-cockroaches &rodents in chocolates

rural distribution

These are needs to be strengthened.

OPPORTUNITIES

Rural markets- india village based & high potential to grab market.

New Tastes - Indian consumers-  like to eat small chocolates  than bars.

THREATS

Cost and price increase. Health consciousness on the rise.Decreasing importance of festivals.Rising demand of people, growing purchasing power .

CHALLENGES

Rise in ingredient prices

Rise packaging costs

Regulatory challenges

Fake confectioneries

Growing health concerns

MY SUGGESTIONS

Bring out new products for health conscious people.

Continue to promote itself as substitute to mithai.

Choco-biscuits should be introduced.

Should use Indian ads and avoid global ads in India.

Consider attractive display or its own ‘Chocolate boutique’ (retail store).

Special chocolates for Christmas should be introduced e.g. rum, champagne flavored

New flavors like strawberry,orange,vanilla etc.

CONCLUSIONSThere is an immense scope for chocolate industry in India

Indian chocolate industry is unique mix with extreme consumption patterns, attitudes, beliefs, income level and spending

Understanding consumer preferences and demands is the key to growth

Pricing, quality , flavors and pack size are some of the important factors

Economical distribution using proper supply chain management is necessity

Brand loyalty should be maintained