While candy giants such as Perfetti Van Melle are looking beyond confectionery, players from other sectors are looking at the segment with great interest. Last month, Chennai-based fast moving consumer goods company, CavinKare, forayed into the segment with the launch of a Rs 1 liquid candy, Funfills, in West Bengal and Tamil Nadu.
Sanjay Sachdeva, business head, foods and snacks, CavinKare, says the candy has been launched under CavinKare’s Chinni portfolio which also has pickles and vermicelli under its umbrella. It is available in six flavours — green mango, sweet mango, lime, grape, orange and strawberry. The other food brand in the company’s portfolio is Garden which it acquired in 2009.
The company will roll out the product nationwide towards the end of this year if the response in Tamil Nadu and West Bengal is encouraging. The company is in the process of expanding its distribution footprint as a starting point.
The confectionery market in India is estimated at Rs 3,000 crore and is growing at 10 per cent. CavinKare will target a 10 per cent share in this market in the first year. The candy will pit CavinKare against the likes of Perfetti Van Melle, Parle, ITC, Wrigley, Cadbury and Nestle among others. According to the AC Nielsen data, Perfetti leads the market with roughly 24 per cent share. Parle and ITC both have 10 per cent each.
A senior executive of a rival confectionery company points out that to crack this sector, new players need to have patience and a strong distribution network. The confectionery market in India is different from many other markets in the sense that it is primarily a mono pack market while the market worldwide is a multi-pack market. The trade is also significantly different with the global market relying heavily on organised trade; in India retail outlets like paan-bidi shops and kirana outlets account for bulk of the sales while organised trade remains insignificant. Functional products and sugar-free confectionery dominate the worldwide market while such products are yet to pick up in India.
CavinKare hopes its FMCG distribution muscle will help its entry into confectionery. The company plans to launch more products to extend its food portfolio for kids, a large consumer segment for the food category. Not just distribution, CavinKare will also aim for differentiated products to help create a niche for itself.