Candico, the Rs 125-crore Indian confectionery major, has adopted a new strategy to grab market share -- going 'back to basics.' Unlike the innovation-based approach that has been used by competitors to drive growth beyond five to seven per cent, Candico is looking at driving growth differently.
"The traditional category like hard boiled candies has been neglected by the organised sector. We believe that there is a huge growth potential in this category. So what we have done is gone back to the old markets and updated the products," said Karan Gupta, Executive Director, Candico.
Interestingly, the company has adopted a triple approach to implement this. "Firstly, the company is targeting traditional categories for innovation; secondly, leveraging it by mass appeal; and lastly, introducing value-added variants to drive growth," he said.
With this approach, Candico claims that against five per cent growth rate across categories, the company has experienced a growth rate of approximately 5 to 10 per cent year-on-year in value terms. Explaining the reason for this shift in strategy, Gupta said, "Most players in the organised confectionary market are venturing into new product categories to drive growth. Often this leads to big budget spends which amounts to Rs 5-7 crore and may not lead to the desired output. In fact, despite huge investments in manufacturing and packaging, there is a chance of failure of products. We wanted to avoid all this."
The company has also made a change in its branding strategy. "We are reducing individual brand names and introducing umbrella branding. The size of the Candico logo will be increased and it will be more prominent on the wrapper," Gupta said.
Innovation has been on at various fronts. In Fruit Candy, the company has stepped away from conventional flavours like orange and introduced new ones like Green Mango, Lychee, Tamarind and Lemon. Candico registered a growth of 125 per cent in this category and is planning to achieve 250 tonne/month in future. In Coffee Toffee, a new variant has been introduced by blending two flavours, cream and coffee. Gupta said the company has achieved 25 per cent growth in this category and is looking at 50 per cent this year. In Lacto, the company claims that the introduction of a soft-centre variant has enabled a 175 per cent growth.