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Purvita Chatterjee

To invest Rs 30 cr towards retail expansion

Mumbai , Aug. 24

Candico India is planning to stretch its brand from confectionery to kids merchandise. In the process of expanding its retail network, the confectionery company intends branching into toys and creating characters for the kids market.

Target kids

Mr Madhav Gupta, Executive Director, Candico India, told Business Line, "It is kids who are our primary audience, so we are planning to have merchandise targeting kids to push the brand forward in the urban markets."

Comparing its retail foray to international retail chains such as Gadget stores and Sharp Image, Candico is planning to get into the high-end market with `funky' gift items and toys for kids.

Retail expansion

Marking an investment of Rs 30 crore towards its retail expansion, Candico is targeting 400 locations across malls and multiplexes in the country by 2010.

Riding on the retail boom, the confectionery company expects to have a mix of kiosks, stand alone stores and shop-in-shop formats. A majority of these formats would get launched through franchisees.

At the same time, Candico is planning to extend its product offerings at its retail stores with new products such as sugar-free chocolates, jellies and mints.

Confectionery

Having sold off its Minto brand to ITC, Candico is re-entering the mints category with its own brand - XXX.

"We would like to target young adults with our range and would be expanding our confectionery segment to have sugar-free candies targeting the 16-25 age group," says Mr Gupta.

Considering its retail products sell at a premium to its mass-market brands, Candico intends stretching its target audience beyond kids at its stores and kiosks.

Currently, the company imports nearly 75 per cent of products for its retail outlets. However, with time, it intends manufacturing its high-end candies at its facilities in Nagpur.

"Once we get the volumes, we should be able to manufacture almost 50 per cent of the products in India and, thereby, reduce our prices," says Mr Gupta.

Apart from Candico, there are other retailers such as Candy Treat and Sweet World, who continue to import all their products.

But the backbone of Candico's operations continues to be its 1,500 domestic distributors who reach out to 250 retailers across the country.

"It is due to our manufacturing and distribution strengths that we continue to be the only home-grown confectionery company which has not been sold out," states Mr Gupta.

With Cadbury struggling to make an impact in the confectionery segment and HLL having withdrawn its Max brand, Candico claims its manufacturing and distribution strengths, which have held it in good stead. With brands such as Locopoco (for gums) and Coffee Toffee, the Rs 125-crore Candico India currently distributes its products to 17 countries across the world.

More Stories on : Strategy | Diversification | Food & Dairy Products | Children & Parenting | Toys

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