increasingly becoming prepared to pay a premium for higher value products.
The organized confectionery segment in India was dominated by the multinational companies; however, domestic players were increasingly finding a prominent position in the market. Cadbury India Ltd. was by far the market leader, followed by Perfetti Van Melle India Ltd. and Nestle India, Ltd. [ Exhibit 4 ]
Although, the post-liberalization era had seen the entry of numerous players, they had to adapt to the Indian market which was different from the developed markets.
India was primarily a mono-pack market while the market worldwide was a multi-pack market. While the trade and distribution in western countries was mostly organized, in India, retail outlets like pan shops and kirana outlets accounted for the bulk of the sales and organized trade still had only an insignificant share in the overall confectionery sales.
Functional products and sugar free confectionery dominated the worldwide market while in India this trend was yet to pick up. The gum confectionery was expected to be the fastest growing category, albeit from a smaller retail base. Exhibit 5 and 6 shows the sales and growth of the Indian confectionary market while Exhibit 7 and 8 show the sales and growth of the Gum confectionary market in the country.
In India 50 paisa was the most popular price-point and around 85 % of confectionery sales occurred at this price point- but there were some products in the rural markets that were available at 25 paisa. The Re 1 price-point was not very popular.
Instead of chewing on paan( betel nut leaf) to freshen one ' s breath or using spices such as fennel to aid digestion, the local population was increasingly turning to branded confectionery products such as chewing gum and mints. Consuming products such as mint and medicated confectionery conveyed a sophisticated image, which appealed to the young people.
Between 1998 and 2003 the per capita consumption of gum in India had sky-rocketed. Each Indian consumer was chewing 64 % more chewing gum and 45 % more bubble gum. Volume growth was expected to slow, especially in bubble gum, which was being considered a mature product. Nevertheless, value based growth was expected to be 41 % in chewing gum and 17 % in bubble gum in the medium term. The market was primarily driven by sales of bubble gum which accounted for over 75 % of the total value of gum sales in India. Although bubble and chewing gum were growing quite fast, functional gums that addressed specific health issues( e. g. fighting tooth decay and plague, gum disease) were virtually non-existent. The only functional gum that was available in the market was Perfetti ' s Happy Dent White, launched in 2001.
Unlike many other packaged food trends in India, growth in gum was not limited to the urban upper classes. Gum was considered inexpensive, with an average unit price ranging between Re. 1( US $ 0.02) and Rs. 10( US $ 0.22). Many Indian retailers had limited product space and gum was small therefore it is also easy to store and transport, even in the rural areas.
Unlike sugar or chocolate confectionery, there were only few important players in the gum segment. Perfetti Van Melle India was the leader with 45 % of the market share; followed by Joyco( 31 %), Candico( 8 %) and Wrigley( 4 %).
Perfetti ' s Big Babool and Joyco ' s Boomer were the two leading brands in terms of sales with 32 % and 30 % share respectively. Other popular brands were Center( Perfetti), Loco Poco( Candico), Double mint( Wrigley), Trex( Joyco), and Chlor-Mint( Perfetti).
THE BIG TWO OF INDIAN CONFECTIONARY MARKET IN 2003
Both the multinationals Perfetti Van Melle and Joyco entered the Indian sugar confectionery market eight years ago. Perfetti and Joyco, unheard of companies when they entered the market, together accounted for almost half of the sugar confectionery market in India presently.
As per internal sources, Perfetti ' s sales stood at Rs. 400 crores in the last financial year while Joyco had Rs. 180 crores. None of the players in the organized sector, barring Nutrine, had managed to cross Rs. 100 crores despite being in the market for decades.
Perfetti and Joyco can be credited for turning around the Indian confectionary market by bringing in innovation up front and making it vibrant enough to attract new players. There was a time when most large companies didn ' t see a viable business proposition in this low value, low margin, and fragmented industry. The perception that developing the non-existent gum and unorganized candy market would be a daunting task kept the market largely undeveloped during the early 1990s. However, ever since the two MNCs entered the Indian sugar confectionery market, with their research and focus on putting brand marketing machinery to work in an otherwise commodity business, it has resulted in the two companies setting the agenda for most players in the confectionery market.
Trying their level best to give some semblance of order and maturity to the Indian sugar confectionary market which did not adhere to the progression seen in the more mature markets- graduating from bubble gums to chewing gums to functional confectionery as they grow up, Joyco and Perfetti started shifting their focus from kids to adults.
As Arun Hegde, Managing Director, Joyco put it," It ' s all
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