“The confectionery segment is growing and consumers are willing to experiment. We see it as an opportunity.” _ Nadia Chauhan Kurup, Parle

Take the case of Cadbury, which, after months of dillydallying, chose July 4 as the day to shake off its uncertainty and launch its first such offering – Bubbaloo bubble gum. Re-entering the confectionery segment (it had launched Googly earlier), it is the assurance of volumes which lured the chocolate major. Close on the heels of Cadbury is the beverage maker Parle Agro which formally re-entered the segment with two new brands – Buttercup and Mintrox – both hard-boiled sweets in the 50 paise segment.

Notwithstanding the wafer-thin margins that are characteristic of the segment, both the beverage and chocolate majors have high hopes. With intentions of emerging as a strong player in the confectionery category, Cadbury is expecting double-digit shares for the brand within two years of launch.

At the launch, Anand Kripalu, Managing Director, Cadbury India, said, “Bubbaloo, along with Halls and Eclairs, will complement our confectionery portfolio and will significantly contribute to enhancing our long-term leadership influence in this category. The new brand is expected to contribute five per cent of our total business. We have imported technology for making this product and have set up new manufacturing lines for the brand.”

Pegging Bubbaloo at Re 1 per unit, the brand will be made available in two flavours – strawberry and mixed fruit. The company would be distributing it through its existing network for the mass market brands.

The Rs 180-crore gum category is now dominated by two big brands – Boomer and Babool — both of which comprise an 87 per cent share in the category.

However, Cadbury expects to differentiate its Bubbaloo brand from the rest with a liquid centre and appeal to a wider audience compared to the existing slab bubble gums targeting the pre-teenage segment. Bubbaloo will bring in its worldwide mascot, Bubba the Cat, and a multimedia campaign would ensure the brand gets its visibility among its target consumers.

As for Parle Agro, it is re-entered the category after testing waters with its chewy candy — Simplee Imlee — for almost 10 months. It is now replacing it with two new brands, Buttercup and Mintrox. Setting up a new division under Parle Confi Company, confectionery will be treated as a separate business by the company with a new sales, distribution and marketing outfit in place. Nadia Chauhan Kurup, Director, Parle Confi says, “We have been studying this market for a while and see it as a large high-volume business. The confectionery segment is growing and consumers are willing to experiment. We see it as an opportunity.”

Impressed with the kind of innovation done by MNC brands such as Perfetti (for Happydent) and Wrigley (for Orbit), Chauhan expects innovation to be the key to the growth in this category. Sanjay Purohit, Executive Director - Marketing, Cadbury India, feels likewise. Says he, “There has been a shift from basic sugar confectionery to more value-added products. The basic toffees have graduated to more ‘sophisticated’ products and people are looking for a better eat-experience product in the confectionery category.”

With price points moving up from 50 paise to Rs 2, both Cadbury and Parle Agro have stepped up investments. Parle Agro has already invested Rs 100 crore in the business and is setting up an entirely new distribution and sales network for its brands. Cadbury has imported machinery to manufacture its new bubble gums and is expecting better margins compared to the rest of the brands in its confectionery portfolio.

Observes Purohit, “Chewing gums have better margins and are not necessarily aligned with the rest of the sugar confectionery category.”

However, distribution may be slightly more restrictive for these products due to their pricing, compared to the rest of the segments within confectionery. In the case of Parle Agro, it has decided to stay away from the gums category as it would be limited to certain outlets.

As Chauhan says, “Chewing gums have restrictive distribution but in the case of hard-boiled sugar confectionery, it opens up a wider network which would include the pan and bidi shops.” Considering that hard-boiled sugar confectionery continues to form the belly of the confectionery market, Parle Agro has launched its butter (Buttercup) and mint-based (Mintrox) hard candies in this segment.

But both players would continue to use the equity they enjoy to build their confectionery businesses. “Cadbury already has a strong portfolio in chocolate, gums and mints. In India bubblegums were a natural extension for us,” claims Purohit, who is using the company’s ready distribution network for products priced less than Rs 5. In Parle Agro’s case, it would use the goodwill of its beverage brands such as Frooti and Appy to make an impact in the confectionery business.

As Chauhan claims, “Parle Agro would use its beverage distribution experience to build its confectionery network.” With more confectionery brands coming into the market, hopefully the second innings for them will turn out to be sweet.

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