Commerce RPPResearch, Powerpoint Presentation and Public Speaking Topic: Confectionery Industry By: Mansi Rughani
What is Confectionery???• Confectionery is the set of food items that are rich in sugar, any one or type of which is called a confection. Modern usage may include substances rich in artificial sweeteners as well.• Generally speaking, confections are somewhat low in micronutrients but rich in calories. Specially formulated chocolate has been manufactured in the past for military use as a high density food energy source.
Sweetening Agents• Confectioneries are defined by the presence of sweeteners, usually sugars. Most common is the disaccharide sucrose. Hydrolysis of sucrose gives a mixture called invert sugar, which is sweeter and is also a common ingredient. Finally confectioneries, especially commercial ones, are sweetened by a variety of syrups obtained by hydrolysis of starch, these include corn syrup.
The confectionery market in India• The confectionery market in India has undergone major changes and growth since the opening up of the economy and liberalization of the investment regime in 1991. India became an attractive place for foreign investment and several large multinational companies entered the market for confectionery products.• Sugar confectionery (candies and toffees) has the largest share (50%), followed by chocolate, (16%), and bubble gum, (10%).
• The organized confectionery segment in India segment is dominated by the multinational companies; however, domestic players are increasingly finding a prominent position in the market. Cadbury India, Ltd. is by far the market leader, followed by Perfetti Van Melle India, Ltd. and Nestle India, Ltd. Other important players are Lotte India Ltd, Nutrine Confectionery Co Pvt Ltd, Candico India Ltd, Parle Products Pvt Ltd and Wrigley India Pvt Ltd.• In the last two years, Malaysia and Singapore have been the leading suppliers of confectionery to India in terms of both value and volume. However, US confectionery exports to India experienced significant growth from 2002-03 and more than doubled in value and increased roughly 80% in volume, Confectionery exports from Spain registered the largest growth, increasing more than 500% in value and more than twice in volume.
Brand and origin awareness While domestically manufactured brands dominate the market and consumers have general awareness about them, foreign products and brands are becoming increasingly known. This trend is particularly noticeable in the urban areas and among middle and upper class consumers. These can be summarized as follows:• The urban market is brand conscious; the rural market is price conscious.• Products from SE Asia and South America are more oriented to the mass market, while European and US products cater to the upscale market segments. Imported products in general are considered to be of higher quality than the domestic ones.
• US brands are less known than European ones. Mars and Hershey’s are the only US brand names with broader recognition in India.• The upscale niche market is focused on brand and image quality. Consumers are looking for known brands with good quality images. Swiss and Belgium chocolates are considered the crème de la crème.• Attractive packaging is very important for the brand image. Indians associate quality with good packaging. Imported brands are presented much better than Indian ones.
Pricing• The Indian market is very price sensitive.• Most confectionery brands of Nutrine, Lotte, Wrigley’s, Perfetti, Candico, Parle, etc. are from the Rs. 0.25 to Rs. 1 price categories. There is big difference in the prices of domestic and imported products. The general rule is that domestic products are the cheapest. Then, there are different ranges of prices for imported products, depending on the brand, country of origin, and product itself. Asian and South American products are usually moderately priced, while European and US products are the most expensive.
• An important factor that affects the price of the products is the Central Excise Duty payable by the organized/registered manufacturers is as follows. For sugar confectionery (without cocoa), it is 8% (recently reduced from 16%); for chocolate confectionery, it is 16%.
PARLEParle Products has been Indias largest manufacturer of biscuits andconfectionery for almost 80 years. Makers of the worlds largestselling biscuit, Parle-G, and a host of other very popular brands, theParle name symbolizes quality, nutrition and great taste. With areach spanning even to the remotest villages of India, the companyhas definitely come a very long way since its inception. Many of the Parle products - biscuits or confectioneries, are marketleaders in their category and have won acclaim at the MondeSelection, since 1971. With a 40% share of the total biscuit marketand a 15% share of the total confectionary market in India, Parle hasgrown to become a multi-million dollar company. While to theconsumers its a beacon of faith and trust, competitors look uponParle as an example of marketing brilliance.
AVAILABILITY• Today, the great strength of Parle Products is the extremely widespread distribution network. Even at the remotest places you can buy Parle biscuits and sweets from the local grocer. It has taken years to create this extensive network.• Parle’s sales force started with one salesman in Bombay and some agents in few other cities. Gradually, Parle Products expanded.• Soon sweets and biscuits were being sent by rail to Calcutta, Delhi, Karachi, Madras and other major cities.• As production increased, distribution was amplified. Full time salesmen were appointed in different areas. Currently, Parle Products has over 33, 00,000 distribution outlets.
History In 1929 a small company by the name of Parle products emergedin British dominated India. The goal was to spread joy and cheerto children and adults alike, all over the country with its sweetsand candies. A small factory was set up in the suburbs of Mumbai tomanufacture confectionery products. A decade later this factorywas upgraded to manufacture biscuits as well. Since then, theParle name has spread in all directions and has won internationalfame. Parle has been sweetening the lives of people all over Indiaand abroad.Apart from the factories in Mumbai and Bangalore, Parle also hasfactories in Bahadurgarh, Haryana and Neemrana, Rajasthan.These are the largest biscuit and confectionery plants in thecountry. Additionally, Parle Products also has 10 manufacturingunits and 75 manufacturing units on contract.
Perfetti Van MellePerfetti Van Melle is a privately held Italian globalmanufacturer of confectionery and gum. It was formed in2001 with the acquisition of Van Melle of theNetherlands, by the Italian group Perfetti of Italy and havingits corporate headquarters in Lainate (Milan), Italy.Perfetti Van Melle bills itself as the third largestconfectionery manufacturer in the world after Kraft Foods(owners of Cadbury plc) and Mars, Incorporated (owners ofWrigley). It employs 17,000 people via 30 subsidiarycompanies and distributes its products in over 130 countries.
Products Some of the products they manufacture include:• Mentos mints• Airheads fruit chews• Chlormint gum• Happydent mint gum• Golia liquorice gummy candy• Alpenliebe caramel chews• Big Babol gum• Meller caramel chews• Brooklyn Chewing Gum• Center Fresh gum in India• Chupa Chups• Smint• Alpenliebe is the flagship brand of Perfetti Van Melle and a leader in the confectionery market.
Alpenliebe Alpenliebe was launched in India in December 1995 with adistinct product proposition:• The candy was an amazing mix of caramel, milk and butter• It was the 1st deposited candy in the Indian market andtherefore the eat experience was most uniqueOther than the Caramel flavour, Alpenliebe is currentlyavailable in Cream Strawberry, Chocolate, Coffee and CreamBanana flavours.Looking back at the last 10 years, Alpenliebe has successfullymanaged to capture the sweet tooth of kids, teenagers andadults across various sections of society.
Alpenliebe has resided in the world of ‘irresistibility’. - It’s a world where you give into temptation without any guilt- It’s a world that lets you indulge unabashedly- A world where you don’t need to justify pleasure seekingAlpenliebe speaks to the ‘child in everyone’, one of the very fewcandy brands in the Indian market that has successfully reachedout & connected with both kids as well as adults.In the year of launch (2001) Alpenliebe become the marketleader with 46% market share, while the category at large wasde-growing. Over the last few years the brand has continued tolead the market with over 40% market share. The Brand wassupported through above the line communication and simpleactivation, promotions etc.Maintaining the imagery whilst also making the brand moreendearing.
Lollipop has always stayed in the kids domain, almost abirthright! It is a memory that every individual would haveconsumed a lollipop atleast once in their life and truly relishedit. But somehow, as part of growing up, largely throughteenage, early adulthood and as full grown mature adults weseem to have grown too big (read mature) to enjoy the simplepleasures.Alpenliebe Lollipop supports the ideas that simple childhoodpleasures and experiences can be re-lived even when one is nomore a child and thereby growing the audience base of lollipopsbeyond just kids.
Alpenliebe MangoFillz was launched as a new propositionunder the Alpenliebe umbrella, and is a candy with liquidMango flavoured filling inside. The product launch is PVMI’sfirst foray into the sizeable candy category of “virgin fruits”.Thisis the first non-cream Alpenliebe candy.Mangofillz has taken forward the overall brand platform of‘irresistibility’ while keeping the focus on the ‘mango’ taste ofthe product. Kajol, the Alpenliebe brand ambassador, is beingbrought in to provide a connect with the parent brand andbring in its heritage, while the communication itself remainsfocused on the product and its own uniqueness, i.e. a puremango flavoured liquid-filled candy.
Big BabolBig Babol was launched in India in 1994, since then it has becomeone of the biggest bubble gum brands in India. Over the years it hasbecome a favourite amongst the kids all over the country.Big Babol is available in Fruit Flavor and Ripe Mango flavour.It is a brand which is known to have very yummy taste and you canblow big bubbles out of it, and this comes with an added advantagethat bubblegum does not sticks to you face. It has been positionedon the fact that how you can use big bubbles to your advantage andmake Big Babol “Bade Kaam ki Cheez”. Over time, especially withthe diametrically different communication route adopted by thetagline ‘Bade…Cheez’, the main product attributes- that it blows thebiggest bubbles and is soft and non sticky has been established verywell.
Center Fresh• Center Fresh, the flagship brand of Perfetti Van Melles was launched in 1994. It was the first liquid filled chewing gum which has tantalized the taste buds of millions of Indians and is a house hold name today. Over the years, Center fresh has grown to become the largest selling gum brand in India. It is available in Spearmint, peppermint and Sweet mint flavours and in the Re 1 mono and 5 pcs Rs 6 stick.• Currently Center Fresh is positioned on the platform of great taste which make them prefer to chew than speak. Center fresh truly Rakhe Zubaan pe lagaam
Conclusions The Indian market for confectionery products has undergone significant changes over recent years. While penetration and consumption levels are still very low, overall sales, and particularly sales of higher value premium products have increased. The availability of imported products has also been rapidly rising since India liberalized its imports regime in 2001. Nevertheless, they are still very small leaving ample opportunities for further growth.• The popularity of chocolate products, particularly boxed assortments for gifts, will continue to increase.• The sugar confectionery will remain the largest confectionery segment. We expect to see growth of new and novelty products, such as mint and medicated confectionery (with added vitamins and/or other minerals), as well as the new to the country sugar-free confectionery categories.
• While the traditional targets for confectionery products have been children and young people, increasing number of marketers have seen growth opportunities in targeting the adult consumer segment. This will lead to new products and marketing strategies aimed at them.• There will continue to be opportunities for new products that appeal to the young consumer. The ever-present stimulus of novelty and fashion, encouraged by continuing exposure to western culture will keep the doors open for new products and new suppliers.• Marketing and promotion expenditures for confectionery products will increase and distributors will require promotional support from manufacturers.
Lets watch fewadvertisements of differentconfectioneries….