To increase the incidence of consumption and enlarge the market, the advertising for éclair brands is moving away from kids.
We often miss candies from our past. The favourite toffees or gums from our childhood at times vanish from the shop shelves by the time we grow up. Some stay. Cadbury Dairy Milk Eclairs, is one such example. Since its launch in 1971, this brand has donned many avatars. It had even been beaten to its game by later entrants in the market like Nestle. The veteran has regained its composure and maintains a lead in value share but the brand still faces the biggest challenge for a confectioner in India — upgrading consumers to a more premium variant.
Nestle had entered the market in 1998 with its eclairs and had been leading the Rs 957 crore market until recently. Other players such as Parle Products, which is among the top two confectioners in the Rs 3,800 crore market, introduced its eclair (2 in 1 Eclair) in 2009, in addition to its Melody Chocolaty. Perfetti, the other big player in the category, came up with its version in 2006 in the form of Chocoliebe. ITC, the third largest confectionery player, launched its Candyman Eclairs in 2003. The eclairs segment accounts for around 25 per cent of the confectionery market and hard-boiled candies for 34 per cent.
The Indian confectionery market is unlike other FMCG sectors. Parle Products Group Product Manager Mayank Shah says, “The confectionery market is entirely price-driven and does not depend on formats in India. The consumer is often a kid with a coin of Rs 1 at her disposal. The question for her will be how many and not what, and hence, candies at different price-points, even if they are of the same type, won’t compete with each other. But different types of candies at the same price point will. The biggest challenge for confectionery marketers in India is how to drive consumers to higher price-points.” So, even if many companies sell eclairs, Nestle, Parle Products, ITC and Godrej Hershey retail theirs at 50 paise, while Cadbury’s CDM Eclairs, Perfetti’s Chocoliebe and Parle Product’s Melody sell for Rs 1.
The confectionery industry in India has several distinct formats, as recognised by Nielsen, the retail audit firm. There are hard-boiled candies which could be lacto-cream-based or sugar-fruit-based, toffees and chewables, lozenges, lollipops and of course, eclairs. But Shah estimates that not more than 10-15 per cent sales in this market come from candies costing Rs 1, the rest are all in the 50 paise bracket. “It is now that confectioners are looking at Rs 1-Rs 2 price-points, but for the last 15-20 years, the 50 paise candy has lorded over the market,” points out Shah. In developed markets, confectionery is often bought in bulk but India remains a mono-pack market. So formats such as candies packed in a roll, which are priced higher than individual pieces, are still to find traction among a larger audience. Parle Products’ Shah says, “Given our price-points, we are the largest player in the confectionery market by way of volume. We could have been highest in value terms as well but we can’t tweak our prices because of the importance of price-play.”
Narayan Sundararaman, executive director (marketing) at Cadbury India, explains, “The way inflation is rising, we will soon see more Rs 2 candies in the market. At Cadbury, we have had the foresight to launch a premium rich brownie variant of our Eclairs early this year.” Parle Products did just the opposite. It had its Rs 1 eclair in Melody Chocolaty but entered the 50 paise market with 2-in-1 Eclair to flank its presence. In both value and volume it is the third largest eclair player in the country with 15 per cent of the Rs 957 crore eclairs market. Cadbury in the duration of October 2010-September 2011, leads with 24 per cent, while Nestle has 19.5 per cent and ITC 13.5 per cent. Perfetti, which had been late to the party, has 6.2 per cent.
“Price is what helped Nestle gain market leadership in eclairs. Cadbury, despite its head start in the 70s, was present only with its Rs 1 variant and Nestle came in with its 50 paise eclairs, which a few others have followed,” says a rival on condition of anonymity. Somewhere, analysts also question if focus on confectionery wavered because of a larger thrust on chocolates at Cadbury. Nestle still has a marginal lead over Cadbury eclairs in volume but trails CDM Eclairs in value. Cadbury’s chances have also been helped by Nestle’s stance on the eclair candy. Analysts remind that it has decided to not invest further in its eclairs. With time, that will only lead to a tapering off of its market share.
Cadbury, however, is still betting on the eclair market, which experts point out is most popular in South Asia as compared to the United States, Latin America or European countries. After all, CDM Eclairs is also one of its power brands. That is why it is pushing towards higher price-points. The Eclairs Rich, which was launched in 2011 has dark chocolate-flavoured filling and a brownie flavoured caramel cover and costs Rs 2.
Packing variations could also add up with CDM Eclairs gift packs retailing at Rs 50, Rs 100, and Rs 125. A stick/roll pack of nine eclairs is available for Rs 10. Sundararaman says, “The stick packs are for consumption on the go. Youngsters today are more mobile than ever, spending most of their time in transit or with friends outside. The stick packs don’t need them to rummage through their bags for individual pieces of the candy.” Gift packs of course will find their way to larger shops and organised retail while the rolls will be found in supermarket. However, the Rich Eclairs will shadow CDM Eclairs, declaring Cadbury’s intent to push for higher ticket prices. For now, the variant brings in about 1.5 per cent of Cadbury’s eclair sales. It is also telling that Cadbury operating in the Rs 1 category has been able to recover shares and move ahead.
Higher price-points could also mean an older audience, with more money at their disposal. Cadbury is looking at teens and young adults as its core audience for the CDM Eclairs and its richer brown cousin. “We want them to upgrade to a superior eat experience. Our research told us that they don’t want a bigger eclair by way of a new variant, so we differentiated the flavours.” That is the reason why Cadbury’s latest advertising for this 40-year old brand now has no kids, the quintessential confectionery audience.
However, not all of the players have eschewed kids as their audience. Godrej Hershey, which acquired Nutrine Confectionery in 2006, has lined up its new ad about its hard-boiled bestseller, Mahalacto, becoming bigger. Says Mahesh Kanchan, vice-president, marketing, Godrej Hershey, “Confectionery is a category where news is extremely important. Kids have a plethora of options and we even compete with other snacking options at Rs 1 or 50 paise prices. Even iconic brands need to keep injecting new features to their products.”
If Cadbury Eclairs avoided a bigger eclair and settled for a flavour-change, Nutrine Mahalacto (which is a hard-boiled lacto candy with 5 per cent share Rs 1,292 crore market) now has 20 per cent more milk and caramel. “We wanted the candy to last longer in the kid’s mouth.” Research told Godrej that is what would take for consumers to switch to Mahalacto. In keeping with the insight of candies competing with snacks, Godrej is lining up a product that will combine snacking, confectionery and chocolate in the range of Rs 6-Rs 10, yet another company eyeing a premium range.
PRICE FIRST, PLACE SECOND
Kotak institutional equities analyst (consumer division) Manoj Menon says, “Confectionery is a very low-involvement category and impulse purchases are mostly at work. Hence, the execution at the point of sale matters a lot. The last mile is crucial in confectionery because most of the selling gets done by salespeople on bicycles going from kiosk to kiosk. So, it keeps changing because often the kiosks themselves keep moving.” Kanchan of Godrej says, “An outlet can store maximum of 10-15 jars, so the place of one’s jar will determine whether the consumer takes it into consideration when buying.”
Kanchan points out that distribution is expensive in the confectionery industry because companies stock three to four jars of different brands but the ticket sizes are much less compared to a jar containing, say, face creams. “The retailer always measures how fast the candies move out of the jar,” he adds. Despite entering at the turn of the millennium, ITC has done well with its confectionery because of a water-tight distribution riding on its cigarette network, feel experts. Leaving older players behind, it enjoys a 12.3 per cent value share in the confectionery market and in eclairs, which hasn’t seen as much advertising as other brands. In fact, it is the fourth largest, ahead of Perfetti.
Sundararaman admits, “We are largely an urban distributed brand. The key is to get into smaller towns through a better wholesale distribution and also direct coverage. Over the next few years, we will drive these for the entire portfolio.” Dispensers for its confectionery have found their way to 45,000 outlets so far. Godrej too is bolstering resources in its core markets with more direct distribution. Not just the number of people but it is also increasing the number of calls they make per day.
Shah of Parle Products feels, “Distribution can only be an enabler but not the driver. The pull generated by advertising remains the driver in the market.” Sundararaman agrees, “Chocolate or candies are not essential products. So, the way to the consumer’s wallet has to be through her heart and hence, an emotional connect through advertising is a must.” Godrej, with its new ad, for example, is maintaining a common visual cue all across — an animated lacto candy figure appears in the new ad (which compares kids’ growing up with the figure growing taller with ingredients), packaging and store displays.
Eclairs poses a challenge because the name itself has become generic. So advertisers need to keep their advertisements as different as possible. Perfetti took a dig at the eclair-eating experience of yesteryears with its last Chocoliebe campaign. It underlined its non-sticky softer caramel cover by saying that people eating it wouldn’t have their jaws locked while chewing on one. It even called itself, ‘Better than an eclair’.
GET TO THE CORE
For Cadbury, its communication brief got distilled in 2008. It came with a product revamp as well. In the early nineties, it had touted that the chocolate filling was none other than Cadbury Dairy Milk. It was in 2008 that Cadbury also withdrew its Eclairs Crunch, which was seen as an Alpenliebe-challenger. “It was a deposited candy and did well for some years but consumers then failed to see a differentiation and demand waned. We took stock of what was the core format of the brand. The choice was to build that up. So, we came out with a reinforced CDM filling and softer caramel cover,” explains Sundararaman.
In 2008, it increased the chocolate percentage in its filling accompanied with the ‘Meetha Bomb’ campaign of a burst of chocolate when chewing on the eclair. Cadbury has since played on the immersive experience in the gush of chocolate and caramel in its ads. “It is meant for the times when young people take a moment off their busy lives. You eat a CDM Eclairs, lose yourself in the moment and then get back to whatever you were doing,” says Sundararaman. Ads such as ‘Doob le zaara’ and the current ‘Get Lost’ followed.
“We did not have to cook up the insight because it lay in the experience that CDM Eclair gives. We have used this core to show our audience how to get rid of intrusions,” says Raj Nair, regional creative director (Mumbai and south) at Contract Advertising which has the CDM Eclairs mandate. Nair points out that the new campaign comprises five different ads (two are already on air); shorter edits will be released to stretch the campaign over a period of time. This would also help to keep the brand fresh in the viewers’ mind and not seem repetitive.
However, fighting for the same coin, companies have ended up conveying similar messages to establish their taste-case. So, if Nestle’s Kitkat chocolate urges one to take a break and even has ads with exploding chocolate bombs on the horizon, CDM Eclairs had the chocolate bomb exploding in the eater’s head to mark the relaunch of the eclair with more chocolate inside. Indeed, Cadbury’s own strain for its 5-Star chocolate bar, which says, ‘Jo Khaaye, Kho Jaaye’ (whoever eats it, gets lost in it) and the latest CDM Eclairs tagline of ‘Get Lost’ are quite similar. In the rendition, of course, the former is done from a third-person’s point of view while the latter eggs the viewer to give it to someone who might be bothering her.
Advertising and variants are ways to the consumer’s minds in the confectionery market. As an industry insider points out, “You have to constantly innovate to keep the audience delighted. But the quantum of innovation is almost negligible compared to developed countries. You don’t see changes beyond flavours and colours. Companies, after all, will have to be willing to invest and market a high-margin premium product to wean the consumer away from 50 paise products. There are products such as layered candies which could be possible innovations.”
Sundararaman echoes others when he says, “There is so much scope to grow with the existing formats. We sell about 5 billion eclairs in a year and even then not every Indian has it. Candies can be had many times a day, so the opportunity for every format is huge.” One reason why he is not worried about CDM Shots, a variant of round globules of CDM that was launched a few years back. It could also compete with CDM Eclairs as the affordable Cadbury in the market. With its current lead and new media strategy, Cadbury hopes to increase the consumption of its eclair beyond five times the country’s population — where it stands today.
