THERE could be a lot more sweet moments for Indian consumers. The UK-based chocolate, confectionery and beverages major Cadbury Schweppes has identified India among its top 12 focus markets globally, in an announcement made last week.
Under a new management structure which would emerge following the proposed demerger of its beverages arm Americas Beverages into a separate company, the Cadbury Schweppes management announced last week that its commercial strategy would hinge on ‘fewer top markets and brands’.
The Rs 1,058-crore Indian subsidiary, along with the UK, US, Australia, Mexico, Brazil, Russia and Turkey, now represents around 70% of Cadbury Schweppes’ global revenues. This, despite beverages brands such as Schweppes, Snapple and Dr Pepper not having a presence in India. The 12 core markets have been forecast to account for growth in excess of 60% over the next five years.
Cadbury India, growing in double digits the past two years, has forecast a healthy 2007 riding on the back of factors such as sharper focus on core brands, product rationalisation and working closely with trade channels.
The Indian subsidiary, which now operates under five categories –- chocolates, snacks, beverages, candy and gums being the newest, is learnt to be in the process of pushing products in categories other than chocolate where it is a dominant player. Of Cadbury Schweppes’ 13 focus brands clocking above average revenue growth and operating returns, two are in India as of now — Cadbury Dairy Milk and Halls.
But sources say it’s a matter of time before Cadbury India brings brands such as Trident and Dentyne gums, and Flake chocolates into India, Trident being the front-runner. The 13 focus brands make up for over 50% of Cadbury Schweppes’ confectionery revenues.
With Cadbury Dairy Milk, Five Star, Perk and Celebrations in its portfolio, the company leads the Rs 1,500-crore organised chocolate market with a 72% value share as per AC Nielsen data. However, it trails rivals in other categories. In beverages, for example, Cadbury’s Bournvita occupies second slot behind Glaxo Smithkline’s Horlicks. Its other beverage brand, Delite, was pulled off shelves following weak offtake. The company recently re-entered the gums category with Bubbaloo. Its earlier foray in chewing gum through Bilkul did not work and the brand was subsequently discontinued. In snacks, Cadbury has one brand — Bytes — as of now, and its candy basket has two brands — Halls and Eclairs.
At the global level, the demerger process separating the beverages arm from confectionery is expected to be completed by the second quarter of 2008. It will result in the formation of two companies — Cadbury plc holding the Group’s confectionery business, and CSAB Inc which will hold the Americas Beverages business. Elaborating on its decision, Cadbury Schweppes announced: “To help drive further revenue growth under a new category management structure, we are focusing our resources on fewer number of markets, brands and customers.