The Hindu Business Line : Cadbury ropes in Big B as brand envoy

The top brass at Cadbury is confident that a turnaround would come about through a series of initiatives the company has taken including, new improved packaging, appointment of Mr Bachchan as the brand ambassador and several new launches to follow.

"There is going to be renewed effort in re-establishing the category,'' Mr Bharat Puri, Managing Director, Cadbury India Ltd, said at a news conference to announce these initiatives.

Cadbury India Ltd will suffer a 3 per cent-5 per cent decline in sales value on account of the controversy. However, sales have shown signs of improvement in December 2003.

In a bid to prevent any incidence of infestation, Cadbury has introduced a double packaging for its 13 gm Rs 5 Cadbury Dairy Milk chocolate, its flagship brand. The chocolate is wrapped in aluminium foil and enclosed in a polyflow pack, which is sealed on all sides. The larger Cadbury Dairy Milk packs will come in poly-coated aluminium foil, which will be heat-sealed and then wrapped in the branded outer package. Both these are first ever in chocolate packaging in India.

The new packaging is going to add to the company's cost of production to the extent of 12 per cent-15 per cent. But at the current juncture, Cadbury does not plan to raise the price of its products. "Our margins could be under pressure, but we are hoping to ramp up volumes, thereby neutralise the cost increase,'' Mr Puri said. The new Rs 5 pack of Cadbury Dairy Milk chocolate bar has been rolled out in Maharashtra and will be rolled out nationally in three weeks, officials said. The new packaging is being introduced for its moulded chocolates.

The capital expenditure of setting up new machinery is to the tune of Rs 12-Rs 15 crore.

Mr Bachchan has been signed on as the brand ambassador for a period of two years, during which period he will endorse and promote Cadbury chocolates. On queries about Mr Bachchan endorsing far too many products, Mr Puri said that he has a universal appeal cutting across ages.

Cadbury has a 70 per cent market share in chocolates. Cadbury Dairy Milk chocolate has a market share of 30 per cent. "Daily 2.7 million chocolate bars are sold, of these1 million bars are Cadbury Dairy Milk,'' Mr Sanjay Purohit, General Manager - Marketing, said.

Following the controversy, the company carried out quality checks at its facilities as well as its C&F warehouses and distributor warehouses and found products free of infestation. "Our quality control goes beyond the factory gate to the distributors, but our control over the retail chain does diminish,'' he said adding that Cadbury products are sold across 650,000 outlets.

"Improper storage and its consequences is not unique to Cadbury. Every food items is affected. Unfortunately, though there is adequate legislation, ensuring compliance at the retail level is impossible,'' he said.

In the aftermath of the controversy, the company launched Project Vishwas, a retail education programme under which 190,000 retailers in key States were covered. The program entailed generating awareness and providing assistance in improving storage quality.

Cadbury suffered major impact in sales in Maharashtra and Kerala. These States account for 20-23 per cent of the total sales.

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