Candy: The Sunk Popularity Fallacy
Despite low marketing and advertising around this simple confectionery segment in comparison to other consumer-packaged goods, the sales are colossal in number. India’s Candy Market continues to flourish and grow at a CAGR of over 9% during 2016-2021 as per Nielsen India. But what possibly are the growth drivers that toiled in the favour of its consistent and booming sales? Is it the changing consumption habits or breakthrough innovations with flavour and texture combinations? Or the riveting avant-garde manoeuvre of candy to gradually replace Re 1 and become the new normal can be identified as one of the prominent explanations in the growing sales? Ojasvi Nath, through this article and combined efforts from the industry experts, tried to decipher the answers of these questions.
Sugar confectionery, also known as sweets, toffees, candies or lollies, heedless of attracting attention, has become an inseparable part of a consumer’s life , mirroring the consumption habits of the Indian market that has given a latent yet gigantic platform to the candy market in the country. A robust growth this particular confy segment has been registered during the last five years and is expected to grow at a double-digit CAGR during the next five years. However, the consumption of candies is becoming inversely proportional to the marketing or advertising involved. Even though there are multiple channels to reach children and adolescents targeted as a major market force in the commercials of intense and specialised food marketing and advertising efforts, we see an altogether different story that worked in the favour of growing consumption pattern and popularity of candy in India.
The Candy Market Metamorphosis
Of late, the visibility of candy as a crucial product has been overshadowed by other alternatives like chocolates, bakery products, biscuits, and much more which can be seen through the diminishing curve of the advertising around the product. However, there hasn’t been any loss when it comes to sales. Overall confectionery can be broken in hard-boiled candy, chocolate candy, mints, gums, and so on. More than 50% of the market is still dominated by HBC, while chocolate-candies (Eclairs) and mints/gums are fast growing. While HBC is predominantly driven by kids, mints and gums get a strong source of their business from youth and adults. In mints/gums, large pocket-packs are increasingly driving adoption and usage.
Avnish Tripathi, CEO – Lactalis Anik, who has worked extensively in the confectionery category with prior experience in Mondelez/Cadbury explains the current scenario of this confectionery segment. “The confectionery market is a distribution-driven market. Despite being $1.5Bn, the market is still growing at a CAGR of 9-10% across different segments. As an impulse category, where the consumer behaviour is variety-seeking, the growth in the market is being driven by innovation which is also helping in driving premiumization.” The confectionery market in India is still in its evolving stage – with the per capita consumption in India at a measly under $15 as compared to several European economies where the consumption is >$ 300. “No surprises, that the market grows at double digits as compared to mature markets which are sluggish at 2-3% growth,” Tripathi adds.
The global confectionery industry is going strong. Although the shift towards ‘better-for-you’ products and clean labels has increased the pressure on manufacturers to reformulate, consumer demand for sweet snacks shows no signs of slowing down. In fact, India is one of the under-consumed countries. The per capita consumption is much lower in comparison to other nations where the per capita consumption is anywhere upwards to 1.5 Kg per annum. And here, we are still under the range of 250 Gm. The size of the country and potential that India holds for confectionary is vast and phenomenal. The future looks bright for confectionery manufacturers. While reformulation will continue to dominate new product launches over the coming years, the market’s flexibility and willingness to take risks will ensure that the confectionery sector retains its growth and innovation potential in the foreseeable future.
Krishnarao S Buddha, Sr. Category Head – Marketing at Parle Products Pvt. Ltd says, “India has largely been a mono-packaged market for many decades. A few decades ago, confectionery was largely sold loose in jars without any wrappers. Consumers were habitual of buying naked candies. Gradually, the pioneers in confectionery like Parle changed the game and came up with packaged and hygienic confectionery complying with the Indian standards. Besides, we also came up with a lot of innovations and unique product offerings which shows how these products have evolved over time. To begin with, we started the orange candy and Kismi. These were the most unique products available when we launched them first.”
Ajay Singh Parihar, Marketing Head-Healthcare OTC, Dabur India Ltd find the confectionery as highly fragmented and cluttered, yet variety-seeking. “Low unit prices allow the category to extend across strata. Given the fact that trials are not expensive, consumers have the liberty to flirt between formats and brands. Also, it’s a widely distributed category with low ticket size for both trade and consumers, leading to a lot of regional play in the marketplace. In this market, consumers value brands that speak to them in the local flavour. Brands such as Hajmola Candy cater to a specific need for Indian ethnic taste with Chatpata at its core. This unique taste proposition has been Hajmola Candy’s USP in a highly cluttered market,” he states.
Innovations & Disruptions
In the year 2015, DS Group- manufacturer of brands such as Rajnigandha Pan Masala, Baba Tobacco, and Catch Spices gained access to the candy section and launched HBC (hard boiled candy) – Pulse. After reaching the pinnacle of success by being the category disruptor, DS Group launched the first television commercial in the year 2017 for Pulse candy. The candy (Pulse) brought back the candy marketing into the limelight at least in terms of visibility.
What worked in the favour, explains Shashank Surana, VP, New Product Development, DS Group, “Pulse, which is a fruit flavoured candy with a tangy twist offers a ‘Unique experience’ and unique flavour combination that makes it stand out from the clutter. It is an innovation in the HBC (Hard Boiled Category) that is highly appreciated by the consumer. initially, the brand was driven through word of mouth and PR which was well supported by digital and BTL media. Now, we are also using ATL and digital media to drive communication and will continue to come up with newer content that keeps the viewer engaged and surprised. Also, we are providing tactical support by another medium in the ecosystem like POSMs, BTL Activations, outdoor for consumer acquisition and retention.”
The industry veteran, Krishnarao S Buddha, Sr. Category Head – Marketing at Parle Products Pvt. Ltd speaks on innovative products developed by Parle that led to an increase in sales because of the product being a disruptor. “Orange candy was one of the first candies launched by Parle followed by Kismi, an elaichi candy, which was amongst our most unique product innovations. Subsequently, we launched Poppins, multiple fruit flavoured candies rolled into one. The consumers loved to buy Poppins. There was yet another path breaking innovation in the form of melody. It’s a unique and differentiated product in the market. Then there was another disruptive product – Kaccha Mango Bite and Mango Bite with interesting packaging.”
The market is slowly and steadily evolving now. To change the mono pack consumption in the market, Parle started coming up with candy bags ranging from Rs.30-50. With the advent of Modern Trade in the last two decades, confectionery presence has grown significantly across markets not just in Modern Trade, even in general trade. “From most of the shops, consumers are willing to buy the bag directly for various purpose and usages. Also, for self-consumption consumers are buying in bulk and storing at home. Even the senior citizens who are low on sugar prefer consuming candys to satiate the sweet tooth. Also, women carry candys in their handbags. Thus, the consumption pattern of candy consumption has changed slowly and steadily from a loose to packaged; from mono-packed to multi and smaller packs. The depth of consumption is slowly and steadily in the country with a fantastic growth story of the confectionery market,” Buddha adds.
1 Candy = Re 1
Price-point upgradation is happening continuously with the 50p price point giving way to Re 1 price point. Several products are now available at 2-3/-. Multi-unit packs are available at higher price points. A very strong proportion of sales is driven by indirect distribution (wholesale) which is helping expansion both in rural and urban geographies. “In the last three years, market has completely moved towards Re 1 confectionery. There is now a continuous movement which is very advantageous to us as well as the marketers where candy is being used as a currency in general stores, modern retail, toll plazas, restaurant, and so many places. If a toll comes to Rs 31.50, it becomes difficult to return 50 paise which is no more in circulation now. This exasperates the consumer, who in a way opts to forgo the remaining amount. However, a lot of consumers demands change. The only option with the toll guy remains is giving back the confectionery of the equivalent amount. Even with the various Modern Trade Markets (supermarkets, hypermarkets) or even a small retailer, there is a lot of rounding off in the bill value that happens, which leaves the retailer with the choice of giving back confectionery (candy) of the remaining amount,” Buddha asserts.
While this is more prevalent across Pan shops, where mints/candys are easily accepted for their complimentary (post-smoking) usage, its being observed across chemists and grocers too. However, Tripathi also believes, “With increasing adoption of non-cash payments, (Credit card/Digital payments etc.), it is expected to get moderated. Recently there has been a TV campaign by Paytm mocking the use of confy as change).”
Further, Parihar comments, “One of the biggest changes witnessed in this category is the emergence of Re 1 price point as the new entry point. After a long haul of the 50 paisa regime in the confectionery space, companies have methodically moved to the Re 1 price point quite successfully, and this cuts across geographies and POP strata. The other new trend is the emergence of ethnic Indian flavours. Dabur has been the pioneer in this category with its Hajmola Candy and recent years have seen emergence of new players offering traditional Indian flavours in this space.”
Marketing Vs Forced Consumption – Which Pattern Boosted the Candy Sales?
With big brands and their presence across various platforms in the form of advertising, the question still is the same. Has the pattern of forced consumption surpassed the efforts of marketing? “We, at Parle, at least have been doing a lot of marketing around the brands like Mango Bite, Kaccha Mango Bite, and other products. For most of our brands, we are doing a lot of advertising and received a good response as well. Even competitors in confectionery have been advertising too. Also, there are lots of marketing efforts like consumer promotions and other attractive offers that we do. There have been marketing around but not just marketing, there is a huge distribution game.”
“This pattern has really worked in our favour and I would really want to encourage it because for me it’s an outflux. This is an avenue of growth and consumption. In a way, it’s a forced consumption. If there is candy lying on the deck of my car, I will eat it. I will keep gulping. But if it is not there, it doesn’t matter. It’s a great opportunity for marketers like us to promote the sales of candy in the market. A fantastic trend which we at Parle would definitely want to encourage,” Buddha avows.
While speaking to a few of the consumers about how actually they buy candy or a candy, one of the consumers respond, “Buying candy for me is a no brainer thing. I either buy it based on loyalty to the older taste or recommendation from a friend or shopkeeper.” On asking about the recent candy/candy advertisement they have come across – “Honestly, more than the advertisement the traditional medium of word-of-mouth worked for me in buying a candy. Other than this, the unwilling buying from the retailer has further played the role. But I don’t personally think candy is something that I would buy based on its marketing or advertising.” Even the other consumers share the same belief of buying candy out of forced consumption or through the word-of-mouth.