Cadbury eyes Indian expansion

05 June 2009

MUMBAI: Cadbury, the confectionary giant, is looking to expand its operations in India, having seen "strong growth" in both consumer demand and market share in the country during 2008, despite the impact of the economic downturn.

While the Indian market is comprised of a wide range of national and regional brands, Cadbury has been trading in the country for decades, although it still sees room to boost its returns.

The company's annual revenues in India currently stand at around £200 million (£322m; €228m), and it holds an estimated 70% share of the national chocolate market, followed by Nestlé, with 25%.

It sells products in 1.2 million stores nationwide, and reports that sales are increasing by 20% on an annual basis, with profits also due to rise by 30%.

Anand Kripalu, managing director of Cadbury India, said that the confectioner is not only "in a position to sustain the growth we have had in the last three years," but could also increase its rate of expansion.

Rather than seeing the fact that "chocolates have never been part of the Indian tradition" as a potential obstacle, he argues that this in fact represents a substantial opportunity.

By adopting a strategy based upon "bringing a cultural context" to its brand management, and "associating with traditional sweets and occasions," Cadbury can communicate with consumers in an effective, relevant way.

Kripalu further suggests that the UK-headquartered firm "should recognise the extraordinary opportunity in Indian sweets, and position ourselves as the modern or better alternative."

Its other objectives include attempting to increase the amount of cocoa it produces in India from 10,000 tonnes a year to 150,000 by 2020.

This would mean Cadbury became "self-sufficient", which not only "makes very good business sense" but also "gives us a very good opportunity to invest and give better returns to the farming communities in India."

Data sourced from Reuters/Financial Times; additional content by WARC staff