Perfetti's ‘Stop Not' chips

Perfetti plans to enter snacks market with ‘Stop Not' chips

Perfetti van Melle, a leading confectionery maker, is planning a foray into the Rs 3,000 crore Indian packaged snacks market with its own brand of chips called ‘Stop Not.'

This is the first time that the multinational company is diversifying into the snacks business.

The Italian-Dutch company is expected to launch two versions (shapes) of chips called ‘Golz' and ‘Diskets.' Across the two versions, it is targeting around eight flavours — ‘thai chilli', ‘tomato chutney' and ‘mad masala.' The launch is expected to be around April-May this year.

Perfetti, a Rs 1,200 crore (2010) company, has around 30 per cent share of the confectionery market.

It manufactures and markets popular gum, candy and mint brands such as Center Fresh, Center Shock, Fruitella, Happy Dent, Big Babol, Alpenliebe, Chocoliebe, Chlormint and Mentos.

Deloitte India said, For a company in the confectionary market, getting into chips is a natural fit. They can ride on the existing distribution as there is a lot of synergy with the market for its existing products.

The chips market is believed to be worth around Rs 1,500 crore (2010) and is part of the Rs 3,000 crore packaged snacks industry. This number represents only national and regional organised (branded) players, though a similar market exists in the unorganised sector as well. Among the former, Pepsico brand Lay's is believed to be market leader, followed by ITC's Bingo and Parle's Hippo.

On the snacks side, Lot of action happening as there is a trend of increasing out-of-home consumption due to the convenience it offers. Strong distribution through small shops also helps. Although there are a few organised players in the space, there is space for more. New players can ride on the volume growth of the category.

Nestle India

Nestle India to set up ninth facility in Himachal Pradesh

Nestle India has chosen Himachal Pradesh for its ninth manufacturing facility in the country. The new facility to manufacture chocolate and noodles may entail an investment of “anywhere between Rs 400 to 500 crore”.

Besides, Nestle also plans to add capacity to its existing units in Punjab, Haryana, Goa and Karnataka; and a new R&D facility in Haryana. Overall, the company has budgeted investment of Rs 1,800 crore in the next two to three years.

Fielding questions from the media at a press conference here to announce the launch of its new Nescafe Sunrise and TV commercials featuring film star couple Surya and Jyotika, company has already invested Rs 360 crore of the proposed investments in a new facility that's coming up at Nanjangud to manufacture instant noodles and another Rs 500 crore on its Goa facility, where it manufactures confectionery.

Sprite: ‘fresh' brand journey

Sprite embarks on ‘fresh' brand journey

Coca-Cola India's clear carbonated soft drink brand, Sprite, has embarked on a new thematic campaign with the tag line ‘First Drink. Then Think'.

A set of three teasers launched the ‘University of Freshology' campaign a day before the ICC Cricket World Cup, on February 18, and the first ‘reveal' commercial was aired on February 25.

The campaign, encompassing on air, on-ground and digital, will be executed through the year. Sources estimate the marketing budget for the campaign to be in the region of Rs 35 crore. The creative agency behind the campaign is Ogilvy India.

The brand has shed its popular tagline ‘Bujaye only pyaas, baki sab bakwaas' with the new campaign. The insight was that today's teens find smart ways out of tough situations with ‘fresh thinking' — drinking Sprite has been portrayed in the television ads as a sure way to trigger fresh thought.

Digital media is playing a key role in the new campaign, starting with a new Web site — www.sprite.in — and an Indian Facebook page. Among several contests is one where visitors are invited to suggest smart endings to teasers that appeared on television. Suggestions getting the most ‘likes' (votes) will get made into a film. A new contest called CricWit will go live on the Web site shortly, and will be driven by the brand's Facebook fan base.

From brands talking to consumers in the old days, moved to having a dialogue with them. Now, with an application like CricWit, the brand Sprite will only provide a platform for consumers to express their thoughts. That will be part of the next phase of this campaign, where fans will be invited to comment on cricket, whether it's the World Cup or IPL. The most popular as decided by followers on Facebook will win prizes.

The on-ground leg of the campaign will be driven through ‘Sprite Gully Cricket Champs'. The third edition of the street cricket property will be hosted across 27 cities in 11 States, with 32 short-listed teams playing in each city. City winners will get a prize of Rs 1,00,000 and runners up will get Rs 50,000. City winners will play for a zonal title and a cash prize of Rs 5,00,000.

The April 2011 edition will be the biggest on-ground exercise by Sprite in the country. On-pack promotions and roadshows, besides radio, print and outdoor advertising, will support the property.

Street cricket is quick-paced, informal, has unusual rules, and is everything Sprite wants to be and stands for. In terms of timing, it will draw upon the youth TG (target group) in a leisure period starting mid-March.

The new campaign ushers in summer for Sprite, which claims to be the second largest carbonated soft drink brand (after Thums Up) with an estimated 14 per cent share.

FMCG: Aspirational goods insight

Aspirational goods to drive FMCG growth

Aspirational products such as chocolates, cold cream, fragrances and breakfast cereals will drive the future of the consumer products industry in India, says a new study by The Nielsen Company. Product innovation, portfolio expansion and aggressive distribution across channels and geographies have helped companies popularise categories such as impulse, health and wellness, lifestyle and convenience, says the Nielsen study on fast moving consumer goods.

These segments are growing at an annual rate of more than 20%. Companies such as Marico, Parle, Dabur and Emami are betting big on such categories.

These segments are the next big thing in the Indian FMCG market, so much so macro-economic conditions like inflation are unlikely to impact their growth if the companies take the right approach.

The growth in economy and higher spending power are increasing the aspiration of Indian consumers who are much younger than before. With such a backdrop, the FMCG industry too has to change its nature fast.

Key impulse products such as biscuits, chocolates, salty snacks and confectionery, which are essentially unplanned purchases for instant gratification, are clocking high double-digit growth rates and rapid increase in retail presence.

The Nielsen study says the huge explosion in variants, price points and pack sizes of such products are acting as catalyst. "Companies are introducing newer attributes like low fat, sugar free, baked and whole grain to entice and attract various consumer segments by creating greater relevance and empathise with their needs,"

At the same time, health & wellness FMCG products are finding greater acceptance among the affluent, urban and health conscious Indians. The study says that this portfolio has evolved from being preventive or supportive nutrition and reflects a mix of indulgence, invigoration and narcissism. Anti-ageing products such as facial creams, lipsticks, eye balms and hair lotions are showing significant growth. Expanding distribution and a wave of consumer interest in these sub-categories have resulted in a surge in their growth rates on a small base.

The study says that rural and semi-urban consumers are now graduating to branded products, giving a boost to the lifestyle category. "Urban aspirations are entering into rural households"

In the lifestyle segment, while grocers continue to be a leading distribution channel, high-end products are finding bigger presence in modern retail. The shift to lifestyle products has been pervasive across geographies, which signals a genuine shift in the purchase basket and lifestyles.

Convenience products such as breakfast cereals, noodles, cordials and cheese have become popular in the last decade due to growing urbanisation, rise of nuclear families where both partners work, increasing disposable income and lack of time. Marketers have spent their time getting these products right to make them available to the Indian consumer across geographic zones and fine-tuned to local tastes. This process will continue as the market evolves.

Communication strategies will become more important for FMCG companies as they focus on these platforms. A particular product, such as biscuit, can be convenience for one section of consumer and impulse for another. It's all about appealing to the evolving consumer needs.

Wipro consumer products

Wipro pads up with Kumble

 

Cashing in on the cricket fever is yet another brand with a new campaign. What is novel this time is that it's a women's brand that is tapping into the Indian cricket craze. With female viewership of cricket on the rise,

Wipro Consumer Care has roped in former Indian captain Anil Kumble in an ad campaign to promote its soap brand Santoor during the coming cricket season.

With the cricket fever on in the country, Wipro believe that there would be a quicker brand recall and it would be top-of-mind for consumers. 

The cricket season being longer this summer (18-20 weeks) with both the World Cup and IPL being played back-to-back, the company is looking at leveraging the captive audiences for the matches. The Company also feel female viewer-ship of cricket is increasing and wanted to be one of the early brands to cash in on that factor.

The soap brand has been using the context of “mistaken age” for more than 15 years now and has been running campaigns with Bollywood actors Saif Ali Khan and Madhavan.

AMWAY

Nutrilite seen as Rs 2,500-cr brand by 2012

  

                                                                 

Amway India expects its nutritional brand Nutrilite to achieve sales of Rs 2,500 crore in India by end-2012.

Nutrilite will easily cross Rs 1,000 crore by the end of this year. With the launch of new products, The Company is targeting sales of Rs 2,500 crore from the brand by 2012.

The company made its foray into the kids' nutritional category, and launched five products under Nutrilite. The brand currently contributes Rs 900 crore to its over all sales. Globally, the brand is worth Rs 14,450 crore.

the nutritional business to grow 25 per cent annually in India, while the overall sales growth is likely to be around 18 per cent.

The nutrition and wellness category contributes around 50 per cent of Amway's sales in India. Last year, the company had a turnover of Rs 1,790 crore.

Currently, Nutrilite has a share of around 19 per cent in the around Rs 2,500-crore Indian dietary-supplementary market. The other leading brands are from Dabur, Nestle and GlaxoSmithkline Consumer Healthcare.

Kellogg's: focus on taste

Kellogg's to focus on taste, health benefits

Leading producers of ready-to-eat cereals, Kellogg's, which has re-launched its kids brand Chocos with essential nutrients, will concentrate more on taste in India besides health benefits as part of its global marketing strategy.

The company in the next 10 days will be launching a 360-degree marketing campaign including television, print, radio and on-ground activation such as setting up kiosks at malls and strategic locations, to re-position itself as a tasty breakfast option for children.

India is a different market altogether, where taste comes above health benefits. Kellogg's are now focusing on this aspect and are relaunching Chocos as a tastier and healthy cereal breakfast. They will also look at their other products moving ahead to improve the overall taste.

Parle: to boost market share

Parle offers more biscuits to boost market share

In a bid to take on its rivals as well as gain market share, Parle Products is offering more biscuits to its customers at no extra cost. Beginning September 2010, the company has increased the weightage of the packets of its flagship Parle-G and “Parle Marie” brands by at least six per cent without any change in MRP (maximum retail price).

Accordingly, the “Parle-G” biscuits - sold only in packets of Rs 5 - now weigh 99 grams up from 94-95 grams. Similarly, the weight of “Parle Marie” packets of Rs 10 and Rs 22 was increased to 144 grams and 392 grams, respectively. The company was previously selling 132 grams and 372 grams of “Parle Marie” for Rs 10 and Rs 22, respectively.

Sources said the company was hopeful of compensating the reduction in margins in per pack sales by enhancing sales volumes. “This is a volume game played with long-term interests in mind,” a source said.

REBRANDING:

Meanwhile, to capture the growing health food market, the company has decided to re-brand its “Parle Cream-Cracker” biscuits to “Parle Active Fit Cream Crackers” next month. The new brand will include sugar-free variants.

Parle at present has over 12 major biscuit brands with Parle G and Marie being its flagship products. The other prominent brands are “Monaco”; “Hide and Seek” and “KrackJack”.

Other than biscuits, Parle has interests in the confectionary and snacks businesses.

HUL: Recent scenario

 

HUL recent scenario

HUL takes cut in margins to persist with ad spend

Offered the choice of cutting back on its advertising spends to deal with rising input costs, Hindustan Unilever (HUL) seems to have decided to sacrifice its profit margins instead. The company's net profits for the quarter ended December 31, 2010 have declined by about 1.7 per cent compared to the same period last year, dented mainly by spiralling costs for soap, detergent and personal product inputs.

The company's sales expanded by a healthy 11.6 per cent this quarter. The company has been successful at driving a higher sales trajectory (growth was 9.7 per cent in the preceding six months of this fiscal), by persisting with fairly high spending on advertising and promotions.

Ad spends up some more

The company's ad spend to sales ratio, already high at about 14.05 per cent of sales in December 2009 has inched up even further to 14.8 per cent to Rs 743 crore in the latest December quarter. That ratio is high even by FMCG industry standards and arms HUL, which already dwarfs its competitors with its size, with a huge war-chest to pump into brand building efforts. HUL's smaller rivals in soaps, detergents and other categories are already beginning to economise to some extent, on ad spend to deal with escalating raw material costs.

Cost squeeze

Rising costs of input such as palm oil, LAB and packaging material have taken a bite out of HUL's profit margins in the latest quarter. A breakup of the numbers shows that the company has had to contend with multiple pressure points on its costs. 

Input costs as a proportion of sales climbed from 48.9 per cent to 51.1 per cent year on year, even as depreciation and ‘other expenditure' too rose.

Price increases

HUL has already begun to take selective price increases on categories such as soaps, detergents and personal products to pass on higher input costs to consumers, in the preceding quarter.

However, the sharp year on year slide in segment margins on soaps and detergents shows that price-lines in this large category are yet to compensate fully for higher costs.

That HUL continues to invest heavily in nascent categories is also evident from negative segment margins in processed foods and ice creams, even as their sales grew at a healthy clip.

Thanks to its unrelenting brand building effort, the overall picture on HUL's topline remains encouraging.

Not only have total sales grown at nearly 12 per cent year on year, individual categories such as personal products (20 per cent sales growth), beverages (9 per cent), processed foods (18.5 per cent), ice creams (31 per cent) displayed very strong growth.

Market shares

This could be a sign that HUL's persistence with ad spends is helping it protect or even expand market shares in its key categories.

As per current scenario, Promotion creates value for HUL...

Kraft Foods sues Britannia

Kraft Foods sues Britannia over Oreo copyright:

US foods company Kraft Foods has dragged Indian biscuits giant Britannia Industries to court for ‘infringement of trademark and copyright, passing off and unfair competition of its globally reputed Oreo brand of cookies.'

Britannia's recently-launched Treat-O biscuits, Kraft Foods alleges, has the ‘same look and packaging as Oreo.'

Kraft Foods Global Brands LLC says that it ‘has filed a suit in the Delhi High Court against BIL, seeking an injunction to prevent BIL from manufacturing, selling, marketing, advertising or in any other manner using and/or allowing or permitting third parties to manufacture, market, advertise or use the distinctive elements of ‘Oreo Cookie Trade Dress' and its packing.'

When contacted, a Britannia spokesperson said, “The company will take the right and appropriate action as it always has.”

‘Unique features copied'

Kraft Foods says that Britannia has copied the unique and distinctive features of the ‘Oreo Cookie Trade Dress' and its packaging in its newly-introduced Treat-O biscuit product.

The company said that the shape of the cookies sold under the brand Oreo, a round shaped cream-filled sandwich cookie, has unique etchings consisting of fine edge linings, inner rings and florets embossed on it, which is known as the ‘Oreo Cookie Trade Dress'.

Kraft Foods has alleged that the edge lining on Britannia's product, the inner rings and the florets and their placement on the product are identical to the original Oreo Cookies.