Bucking the trend, Godrej Hershey has decided to increase the grammage of its flagship confectionary brand — Nutrine Mahalacto.
Even as other FMCG firms are cutting pack sizes to combat inflation, Godrej Hershey plans to increase the pack size of its candy by 20 per cent (from 2.8 gm to 3.4 gm) keeping the price intact at 50 paise.
Also, the company says, as of now, there are no plans to bring in Hershey's iconic chocolates — the focus will remain on boiled candies.
In what it calls a bold move, the company proposes to add more milk and caramel to Nutrine Mahalacto. According to Mr Mahesh Kanchan, VP and Marketing Head, Godrej Hershey, “By adding more milk and caramel into Nutrine Mahalacto we want the candy experience to last longer with kids.”
Mr Kanchan is betting that this move will help up the brand's volumes in the hard fought sugar confectionary category by 50 per cent.
With six major players in the sugar confectionary market and with each having almost similar shares between 10 to 15 per cent, it has become necessary for Nutrine to increase its “share of voice.” Mr Kanchan says they will also be launching a new TVC for the brand. “Through a new TVC for Mahalacto we expect our share of voice to go up due to increased GRPs (gross rating points) on television.”
The Rs 3,500 crore sugar confectionary category is highly cluttered and currently market growth rates are at 15 per cent.
The Nutrine brand was acquired by Godrej and currently has a strong hold in the southern and eastern markets.
No Hershey's chocolates for now
As of now, the company says it has no plans to launch the iconic Hershey confectionary portfolio that includes the bite sized Kisses in the country. So far only chocolate syrups and milk mixes have been launched through the joint venture forged between Godrej and Hershey in 2007, in which the US confectionary major owns majority (51 per cent) stake.
Says Mr A. Mahendran, Director, Godrej Hershey, “The company is basically running on the hard boiled candy business of Nutrine today and we have not taken any decision to launch Hershey's chocolates.”
In fact, there have been reports of the JV hitting a roadblock, as unlike Godrej's other joint venture with Tyson Foods which has managed to become profitable, the Hershey's partnership is yet to make money.
“It was Hershey that wanted to enter India and was looking for a partner to join hands in the core confectionary business and had decided to leverage our distribution. It had decided to launch its portfolio within the next 3-4 years but as now no decision been taken regarding the same,” added Mr Mahendran.
Godrej has set up manufacturing facilities in Mandideep in Madhya Pradesh to manufacture these products to avoid paying steep import duties and adopt a more reasonable pricing for the Hershey franchise in India.
“We are not importing any of the Hershey products and even the syrup is being manufactured locally,” says Mr Mahendran.