As more Indians begin to treat themselves to little luxuries, Cadbury PLC hopes to capture millions of new customers with chocolates that sell for a few pennies.
The British candy maker has been in India for more than 60 years and dominates the chocolate market here. Still, less than half of India’s 1.1-billion population has ever tasted chocolate. Traditional sweets or «mithai» still dominate the industry in India, where sweets are given and eaten at festivals.
The British candy maker has been in India for more than 60 years and dominates the chocolate market here. Still, less than half of India’s 1.1-billion population has ever tasted chocolate. Traditional sweets or «mithai» still dominate the industry in India, where sweets are given and eaten at festivals.
Chocolate has already caught on within the increasingly affluent middle class. Cadbury’s Indian chocolate sales have been growing by 20% a year for the past three years. Now, Cadbury is reaching out to lower-income consumers with cheaper products.
«We seek to reach out to all of those consumers that are away from the cities and to sell [small] piece products at low price points,» said Todd Stitzer, Cadbury’s CEO, in an interview. Its latest innovation designed for India is Cadbury Dairy Milk Shots. The pea-sized chocolate balls have a sugar shell to protect them from the heat. They were launched this year and cost only two rupees, or about four U.S. cents, for a five-gram packet. Cadbury also sells other candies, such as Eclair caramels, for two cents.» It is a sort of temperature-friendly chocolate treat,» said Mr. Stitzer of the Milk Shots. «It’s priced at a lower range to make it more accessible.»
India and other emerging markets are increasingly important for Cadbury as growth slows at home. Last year, emerging markets accounted for 35% of Cadbury’s sales and around 60% of its sales growth, Mr. Stitzer said.
India and other emerging markets are increasingly important for Cadbury as growth slows at home. Last year, emerging markets accounted for 35% of Cadbury’s sales and around 60% of its sales growth, Mr. Stitzer said.
«Emerging markets like India are a key growth driver,» said Anand Kripalu, president of Cadbury Asia. Low prices are key, he says, to make chocolate more affordable to the average consumer.
Cadbury began operations in India in 1947, importing milk chocolate bars. It wasn’t until 1957 that it set up its first factory. Then, Cadbury was considered a luxury product purchased only by the elite.
Today, Sriram Singh, a night watchman for a building in Mumbai, can afford to buy chocolate. «I bought my daughter a Cadbury chocolate a few days ago because she did well in her exams,» he said. He says he buys chocolate for his daughters as rare treats but prefers traditional sweets on special occasions.
India still has one of the lowest per capita consumption of chocolate in the world. According to Cadbury, the size of the Indian chocolate market is $465 million in annual sales, compared with $4.89 billion in Britain, which is one-tenth India’s size. Cadbury estimates India’s chocolate and confectionery market will grow at more than 12% every year.
(Leido WSJ)