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As rural India develops taste for chocolate, Cadbury gets a big bite

Reuters|
Cadbury choc's out a plan
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Cadbury choc's out a plan

Two years ago, Satish P., a bakery owner in the small village of Harohalli near Bengaluru, had his doubts about stocking Mondelez’s Cadbury Silk bars. Priced between 70 and 170 rupees, they seemed out of reach for customers used to paying only 5 rupees for the tiny chocolates he has sold for years. But he took a chance and now rings up to 3,500 rupees ($50) in Silk bar sales a month.

“Villagers can afford premium chocolates now,” he said.

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India's growing sweet-tooth
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India's growing sweet-tooth

At $1.9 billion in annual sales, India has plenty of room to grow. China, also a developing economy with a similar population size, is a $3.2 billion market but both pale in comparison to the US market of $19.2 billion, Euromonitor data shows.

Last year, chocolate sales in India jumped 15.4% after the government, keen to win re-election, overhauled its national sales tax for many items. The cut in tax to 18% from 28% reduced chocolate retail prices and companies nearly tripled the amount they spent on promotions, according to market research firm Nielsen.

Mondelez says its Cadbury brand, which has worked for decades with WPP’s Ogilvy India on Bollywood star-studded TV ads, is spending more on marketing. And to tap online demand, the company has created a Cadbury-only store on Amazon.com that personalizes gift boxes for India’s year-round festivals.

It is also introducing new products. Last month, it launched a low-sugar Dairy Milk bar, addressing a growing market for healthier products in India where 9% of adults have diabetes.

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Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service