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Cadbury: India Will Miss You!

Cadbury: India Will Miss You!

January 25, 2010

As Kraft takes over Cadbury’s, it’s not just Brits feeling blue. So what does this deal mean for the Indian consumer?

‘Kuch khaas hai hum sabhi mein…la la la…kya baat hai zindagi mein…’

Can’t seem to get that jingle out of my head as I write this post! One of Cadbury India’s many memorable ad campaigns that all of us in India grew up with in the 90s. Times were innocent then, the internet was still to overrun our lives & a bar of chocolate was a treat to be reserved for birthdays and weekends. In fact, the word chocolate was & still probably is so synonymous with Cadbury’s that I vividly remember occasions when my mother promised me 5 rupees to go and buy a ‘Cadbury’ from the local shop if I completed my homework on time. Chocolate meant Cadbury’s Dairy Milk. Period!

It’s ironic though that this much loved British company made its foray into the country in 1947, the same year India got her independence from the British. What a remarkable date to begin a love affair that’s still going strong 63 years on!

No wonder then that I too felt gutted after the Kraft takeover deal was announced. After all, for anyone growing up in India in the 90s post fifty years of socialism, there wasn’t much to identify with & the existent brands commanded a high degree of loyalty. New multinational companies were just making inroads into the country but it was difficult for them to take on the existing giants. Many got their strategies horribly wrong, misjudging the completely different consumption patterns of the Indian market and some had to make an exit pretty much within a year or two of launching their product.

Take for instance Kellogg’s Cornflakes – the hugely successful cereal brand failed miserably in their first attempt to launch in 1995. Indians, used to a piping hot homemade breakfast, were just not up to the idea of shelling out an extra buck to eat cold cereal in the morning! Kellogg’s sales were less than 20% of their expectations and it is only recently that the company has met with some success back home. Of course many others in the FMCG space like Nestle for instance have thrived in the burgeoning Indian marketplace, but many years on Cadbury’s still remains an undisputed leader, at least in the chocolate business, controlling two thirds of the Indian market.

Its revenues from chocolates and confectionery for 2008 were at Rs 1200 crore compared to less than Rs 700 crore for its rival Nestlé, and it has seen profits (PAT) grow by more than 40% in the last couple of years. A lot of this success probably has to do with the hugely innovative brand campaigns Cadbury’s has run for years, appealing to the average Indian through typically Indian concepts like celebrating moments of joy by indulging in your sweet tooth, or the happiness of sharing a bar of chocolate with the family and so on.

Kraft will now have a huge legacy to live up to as it enters India. And analysts are saying it is going to be a tough battle for the company as it tries to make inroads into one of the largest markets in the world. For one, competition is strong in the food space and then there is the big question of understanding and adapting to the idiosyncrasies of a complex market like India.

But on the other hand experts say it couldn’t have gotten bigger for Kraft as it gets ready for its Indian sojourn. For starters, Kraft doesn’t have a meaningful presence in the country and despite its best efforts, the most visible Kraft product is Tang, the flavored drink. The Cadbury’s deal will not only guarantee the company a strong distribution network for its own products, but also give it instant access to the hugely profitable chocolate and confectionary business in India. For India as a whole, this deal probably heralds another era in our love for chocolates. Consumers will now have a much wider choice as Toblerone fights it out with Dairy Milk on the same rack. Meanwhile it’s also going to be a tough battle for Nestlé and other homegrown companies like Britannia and Amul as they compete with the world’s second largest food and beverage maker for the largest chunk of the Indian pie.

All in all, while consumers will only benefit from this deal, what’s still unclear is what Kraft will do with the branding. Will it keep the bar of chocolate that offers the goodness of one and a half glass of milk intact in all its purple glory, or will it be changed to something unrecognizable? Cadbury India claims the brand has enormous strength and will carry on the way it is.

For old time’s sake, let’s hope they are right!

1 Comment

  • Piyush Agarwal
    Piyush Agarwal
    11.02.10 12:49 PM
    Very well written post. Even I was quite sad when I heard Cadbury been taken over but as you said consumers may be the ones who gain in this process. This will make it easier for Kraft products to reach the masses, Toblerone for one. But I really do hope they do not try to change anything in the Cadbury branding and its image..

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