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Candico aims to provide entire confectionery range available worldwide
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Saturday, 30 June, 2007, 08 : 00 AM [IST]
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I) Limited, in an e-mail interview with Meghanadan S of Food & Beverage News, shares how he has led Candico into valuable partnerships with leading international players for revamping its manufacturing and marketing capabilities. He has firmly positioned Candico on an aggressive growth path with strategic acquisitions and joint ventures in international markets. Excerpts:
Was it a decade of sweet times for Candico India, since you began operations in 1997?
In 10 years, Candico has become a truly Indian multinational. Today, we are very happy that Candico is the only Indian MNC in the confectionary industry that has left a mark globally. We are the only company that has manufacturing plants abroad.
What are the innovations the company is working on?
Technology changes every three months. It is difficult to keep pace and maintain standards along side. The buzz is to go global. Thus, a minimum requirement is to match up with the international standards. Vegetarian Jellies are the latest to be launched by Candico. The market currently is flooded with jellies which have pork and beef in them. Candico is the 1st company in India to launch vegetarian jellies. Candico is constantly innovating and believes that innovation is the key that drives the market. We make a deliberate effort to be in sync with international trends and to make them available to our Indian customers.
How has been the growth in the Indian retail confectionery market?
Candico is the first Indian confectionery company to enter organised retail. This specialty confectionery retail initiative comes at a time when the retail sector in India is witnessing rapid expansion. The Candico retail model is a mixture between kiosks and candy shops. Within kiosks, the company has both stands alone as well as shop in shops. One of the recent tie-ups that Candico has entered into is a national deal with Pyramid Mega stores for all their Indian locations as a shop in shop concept. The company has also signed with Parsvnath, DLF, Inox, Fun Republic etc for candy outlets at all their current and proposed malls.
There are low-priced local competitors on one hand and the MNCs on the other. What does it actually take to be the frontrunner?
In the mid-90s companies used to adopt lower pricing strategy or some other aspects to fight the MNCs, but Minto was the first Indian brand that took on the MNC brands head on through aggressive advertising. Polo used to be pushed as the mint with a hole. So we took them head on by saying if you don't have a hole in your head, there is no reason why you should have it on your mint! So we have kept up this aggressive, head-to-head image even today. Our aggressive spends on satellite television channels ensure that Candico's brands are known throughout South Asia and Middle East.
What are your Indian expansion plans?
We have planned an aggressive domestic expansion strategy. Candico currently holds an 8% share in the more than Rs 1500 crore Indian confectionery industries, a significant achievement in a highly fragmented and largely unorganised market where only a handful of players can boast of national brands. A confectionery is a business of volume and Candico plans for at least a 100 stores in the next 24 months. The company targets the newly emerging affluent middle class.
In the domestic market, we are coming up with a lot of innovations. One of the most recent product launches that we had was Lacto, where we took out a new range for candies. We have a lot of product launches lined up in the next three to four months. We have gift packs coming up for the festival season. One of the fairly new things that we are planning to enter into is speciality retailing. We believe that the Indian consumer needs to get the entire confectionary range that is available all over the world, which is difficult in price points of Re 1 and 50 paisa. So we are planning to set up retail outlets across the country in all the malls. We will have specialised retail shops, branded under Candico, which will sell all the candies of the world. This should happen before the end of this year.
You claim to have the largest confectionery manufacturing facility in India. Any plans to expand capacity?
Candico, an ISO 9001 - 2000, HACCP and FDA certified company, owns India's largest integrated confectionery manufacturing facility. Located at Nagpur, this state-of-the-art facility is spread over a sprawling 15-acre campus. Equipment used in the factory is the same as used by global confectionery giants. The plant has a production capacity of 45,000 tonnes, which makes it one of the largest manufacturing facilities of its kind in India. The plant also undertakes contract manufacturing for large players in the industry. Its current and prior clients include ITC, Nestle, Nutrine, Dalmiya Consumer Care and HLL.
Do you think the manufacturing standards in India are adequate? How do you make sure the facilities adhere to the regulations?
Confectionery is a complicated market in India, where factors such as bulk sugar prices government policy and mass-market distribution play an important role in driving the volumes and fixed points.
However, Candico is as par with International standards. It has manufacturing facilities in India, Tanzania and South Africa. Candico is ISO 9001-2000, HACCP Certified & FDA Approved. Thereby, Candico is abreast with the latest in technology and leaves no scope for any loopholes.
Is the overseas market more lucrative than the domestic ones? What are your overseas expansion plans?
The company's international expansion plans include a combination of organic and inorganic strategies, through strategic acquisitions and mergers, joint ventures or setting up of independent manufacturing facilities in individual markets. It is setting up a 6,000 tonne manufacturing plant in Johannesburg (South Africa) at an investment of US$5mn for catering to 7 countries in the South African region. Having conducted an extensive market survey and competitor analysis in this market, Candico is gearing to tap the huge potential of this market where foreign brands have so far had very low penetration. Its plans beyond this venture are also well on their way.
The company will follow a strategy of offering its own brands in the international market, in addition to promoting the acquired brand portfolio. Brand Candico will be introduced in markets to which the company currently exports. These include UK, USA, New Zealand, Australia, Mauritius, South Africa, Maldives, Madagaskar, Angola, Nepal, Algeria, Uganda to name a few.
What is your market share in India?
Currently our market share is over 8%. Our key brands are Eclairs, Koffi Toffi and Lacto, each own more than 20 per cent share in its category. In gum, we are the largest in the category. The only reason we have dropped is that there are some categories that we are not into. Like tablets for instance, we sold Minto to ITC and so we cannot separate the tablet market.
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