CONFECTIONERY PRODUCT :
MINT CANDIES
Hara Prasanna Naik Rajat Gupta Elsa Gleise
Analysis of a fast moving consumer good.
Agenda
Confectionary Sugar Candy Mint Candy
Understanding India
Understanding Confectionary Market
Product Analysis
Understanding India
Immature market ( per capita consumption is 18 gm vs 3000 gm world average ) Fastest growing in world (rising disposable income , urbanization and growth of organized retailing) New trend Gifting chocolates during festivals Entry of Multinationals (India based) and Imports (since 2002) Low Price , large volumes (5TH in world) , Bottom of Pyramid Distribution is key
Health , Premium , Value-add
Bournville , Silk , Sugar-free
Rich
Experimenting , Brand Conscious
Consuming Class and Climbers
Aspirants
Kitkat , Dairy Milk
Price Sensitive , Brand Hoppers
Shots , Eclairs
The confectionery industry in India
Metric Market Value at End of period Growth Rate (CAGR) 2004-09 10.5% 2009-14 12.4%
50
$1.27 B $2.28
Market Distribution
RURAL
500
URBAN
47 44.2
48
52
450
45
400
350 300 250 200
40
35
29
Chocolate
Sugar Confectionary
27.2 24
Gum
30 25 20 15 10 5
28.6 20
32 68
ORGANIZED
150 100 50
8
6
Market Size (in million US $) New Product Launches Volumes
Sugar confectionery
44
18 5 18
Fruit / Hard boiled Eclairs Mints Toffees Digestives / Herbal Cough Lozenges
51
$400m , 6% CAGR Highly fragmented market Strong regional players Important ones :
Perfetti Van Mille , ITC , Parle ,
Parrys , Nestle , Nutrine , Ravalgaon , Dabur etc
32%
24%
16% 7% 8% 13%
Perfetti Parry's Ravalgaon Parle Nestl Other
Low involvement Low brand awareness High switching Low price-point (Rs 0.5 / 1) High volumes Threat from unorganized sector Impulse buying Needs good distribution
Mint confectionery industry in India
NEW ENTRANTS
Imports allowed after 2002 Low CapEx Many new players Cross-segment play
SUPPLIERS
Increasing costs Expensive sugar replacement High packaging cost High distribution cost
EXISTING FIRMS
Intense Competition Similar proposition Volumes leadership Distribution battles High marketing expenditure
BUYERS
Low brand awareness High switching Low involvement Fixed price-point
SUBSTITUTES
Sugar free Chewing gums After-smoke products Teeth whiteners Mouth fresheners
The confectionery industry in India
Growth of the confectionery market since the beginning of the
1990s with the liberalization of the country. Transformation from a commodity market to a branded product market ruled by multinational companies. However, Local companies also are increasingly finding a prominent position.
The most important companies are:
Cadbury India, Ltd. (market leader) Perfetti Van Melle India, Ltd. Nestle India, Ltd. Lotte India Ltd, Nutrine Confectionery Co
Focus: Sugar Confectionery (candies) = 50% of the market.
History of the product
Launched in 1997 by Perfetti Van Melle India, Ltd.
A green candy (followed later by a gum version). It was launched in the health care category (use for fresh
breath)
Target of the product: young people (15-34 years old) Very popular in India
They use a fun image to attract young customers.
Competitor Analysis
There are 4 main competitor products : Nestles Polo ITCs MintO Fresh Mentos Halls fresh
Marketing Campaigns
For a low involvement product, use of humour and ad repetition is important.
Chlormint Dubaara Mat Poochna, Salman Khan as ambassador
Halls Fresh Thandi Saans ka Blast
Mentos Dimaag ki Batti jala de Polo mint with a hole, polo khao seeti bajao Minto Fresh Laila ko karna ho impress toh khao Minto Fresh
In a very low involvement product category, where the product differentiation is low; in order to create a pull, advertising is the right strategy and doing the right advertising with right ad story an important determining factor.
Promotion Strategy
Perfetti can have tie ups with major retailing outlets like More,
Big Bazaar, Metro, etc. and have their boxes kept at the billing counters which would give Perfetti visibility and it is a proven way to increase sales.
New and attractive packaging.
Chlormints Distribution Strategy
After acquiring Van Melle, Perfettis distribution system
grew bigger by 3 lakh outlets and the company started focusing on small retailers
The company paid 5% margin to the distributors
compared to the average industry figure of 10 %
Retailers were paid 15% when the average standard was
30%
Recommendations
Promotion of Chlormint in school and college fests. Brands like
Alpenlibe and Center fresh are already popular among college going people.
Can be introduced in toll booths and ticketing counters as it is a
low purchase product.
Bundling their products with stationary products and targeting
young school going children.
Introduction of stand alone vending machines in smoking lounges
with an attractive design.
THANK YOU
