How Cadbury keeps hitting the sweet spot

The market share of Mondelez, which owns Cadbury, for its premium brands is way ahead of competitors, despite a stiff fight in this arena.

A woman poses with a 150g of Toblerone chocolate in Loughborough, Britain, November 8, 2016. Photo: Darren Staples/Reuters

IMAGE: The premium segment, say experts, is around 30 per cent of India's Rs 8,200-crores overall chocolate market. Photograph: Darren Staples/Reuters.

One of the fastest growing chocolate categories in India, the premium segment, is also among the most competitive. And, American major Mondelez, maker of the Cadbury brand, retains its hold here by a wide margin.

According to Nielsen data, sourced from the industry, Mondelez, the multi-billion American company (owners of Kraft, Oreo, Nabisco) which took over the classic, oh-so British brand in a hostile takeover in 2009, has nearly 24 per cent of the market where the unit price is Rs 40 and above.

In contrast, rivals Nestle and Ferrero have barely 1.1 per cent and 0.6 per cent, (both figures have been rounded off) respectively, in the same category.

The premium segment, say experts, is around 30 per cent of the Rs 8,200 crores overall chocolate market in this country. It is also growing at a faster clip, at nearly 20 per cent annually, ahead of the overall chocolate market’s 13 per cent yearly growth.

The Cadbury name is seen on a bar of Dairy Milk chocolate in this photo Illustration taken in Manchester, northern England, on January 19, 2010. Kraft Foods was close to announcing a recommended deal to buy Cadbury for around 11.7 billion pounds ($19.2 billion) after it offered more cash in late-night talks to break a four-month impasse over price. Photo: Phil Noble/Reuters

IMAGE: Cadbury has consistently tried to innovate in India's premium market, to stay ahead, offering new products al the time. Photograph: Phil Noble/Reuters.

Premium brands like Silk from Mondelez have also done well, Nielsen data show, growing its share by 200 basis points to touch 5.5 per cent now, from 3.5 per cent in 2015.

A Kit Kat chocolate bar is pictured in London, Britain May 17, 2017. Photo: Stefan Wermuth/Reuters

IMAGE: Nestle has plans to launch new versions of KitKat in India. Photograph: Stefan Wermuth/Reuters.

Prashant Peres, director, marketing, chocolates, Mondelez India, said the company has consistently innovated in the premium market, to stay ahead.

“Innovations in the Silk portfolio like Silk Oreo (combining biscuits and chocolates), Bubbly (aerated chocolate) and Caramello (liquid centre-filled chocolate) are together now nearly Rs 400 crores in size. Of this, Bubbly, launched in July 2015, is Rs 261 crores. Some other innovations such as Cadbury Dairy Milk Marvelous Creations and Cadbury Fuse are also growing their share,” he said.

Cadbury Fuse, launched in September 2016, has a share of 1.1 per cent, according to Nielsen data. The market share of Marvelous Creations, also launched in 2016, could not be ascertained.

Ferrero Roche chocolates. Photo: J.P.Lon/Wikimedia Commons

IMAGE: Ferrero Roche owns just 0.6 per cent of the premium segment in India. Photograph: Kind Courtesy J.P.Lon/Wikimedia Commons.

Mondelez’s premium launches come as rivals Nestle and Ferrero press the accelerator, launching new variants of flagships like KitKat and Ferrero Roche, pushing distribution aggressively and increasing investment in the category.

Ferrero, which has an overall market share of 8.5 per cent in chocolates, has said it will double investment in India to Rs 1,600 crores in the next few years. It is the third largest chocolate maker in India, after Mondelez (65 per cent overall market share) and Nestle (14.6 per cent overall), respectively.

A worker enters the Cadbury factory in Bournville, central England, January 19, 2010. Kraft Foods sealed a friendly deal to buy British candy maker Cadbury for about $19.6 billion (11.9 billion pounds) after frantic last-minute talks broke an impasse over price. Photo: Darren Staples/Reuters

IMAGE: Mondelez, the multi-billion American company (owners of Kraft, Oreo, Nabisco) which took over the classic, oh-so British brand in a hostile takeover in 2009, has nearly 24 per cent of the premium chocolate market in India, where the unit price is Rs 40 and above. Photograph: Darren Staples/Reuters.

Peres says Mondelez will sustain its momentum in the premium market with new launches. In the past three years, it has put forth nearly 10 new products in the premium market. The company might also introduce new global brands in the premium market, sector experts said.

Besides Toblerone and Cadbury, it has no other global chocolate brand in India.