confectionery industry
TRANSCRIPT
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