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BRANDS Perfetti's Big Bite Nifty products and positioning have helped the Italian confectionery major carve out a niche for itself in a crowded industry. By Shamni Pande
But it's not a slouch that Pelle has inherited from Perfetti's erstwhile CEO, Natalino Duo. In the six years that it has been around in India, Perfetti has grown from zilch to Rs 200 crore in sales last year. Besides, it has redefined certain segments in the market with its top-selling candy brands, Cofitos, and Alpenliebe (pronounced al-pen-leebay). ''Earning our place under the sun here hasn't been easy,'' says Pelle. ''But we've enjoyed getting people to pronounce Alpenliebe right.'' Traditionally, the Rs 1,300-crore confectionery market has been dominated bysugar-boiled candies. But in terms of value, chocolates have hogged the limelight. Loud Brands As a new entrant in 1994, Perfetti decided to do two things: One, introduce differentiated products at popular price-points, and two, unleash a communication blitz to establish its brands in a market that is impulse-driven. Ergo, its first offerings were innovatively-developed and marketed chewing gums. The maiden product, Centerfresh, cashed in on novelty. While competitor brands came in the traditional stiff formats (squares and strips), Centerfresh had a stiff outer crust with a semi-liquid core. At the same time, Centerfresh was priced at an attractive Re 1 apiece to ensure consumer trial. Similarly, Big Babol-aimed at kids-and Brooklyn (a Wrigley's wannabe that was quickly shelved) were launched soon after to consolidate Perfetti's position in the market. Of course, the brands were backed by big-bang ads. For instance, Perfetti has already spent in excess of Rs 35 crore in promoting the Big Babol brand alone. Perfetti isn't the only one to have benefited from its high-decibel campaigns. The category itself has gained. Six years ago, the segment was Rs 35-crore big; today, it has ballooned to Rs 200 crore. That's an annualised growth rate of 30 per cent versus the 5 per cent of the early 90s. Says Jagdeep Kapoor, 39, Managing Director, Samsika Marketing Consultants: ''Unlike most others, Perfetti took this fun segment seriously and helped rejuvenate it.'' But could Perfetti have made do with a smaller ad budget? For example, arch-rival Joyco India, a fully-owned subsidiary of Agrolimen of Spain (previously known as Generale De Confiteria), has managed to create a market-leader in its Boomer brand at a budget of Rs 17 crore. Pelle, however, says that there are intrinsic differences in strategy between Perfetti and Joyco. Apparently, the Italian company is against putting all its eggs in one basket, whereas Agrolimen had until early this year just one brand in the market. Says Pelle: ''In an impulse-driven category, you have to build brands that last.'' That's another reason why it is into event promotions. Its Big Babol quiz for kids covers 1,100 schools and five lakh children. Notes Pankaj Wadhwa, 37, Managing Director, Kidstuff Promos & Events: ''Children are fickle and get bored pretty soon with taste and even their toys. So marketers have to constantly look for ways to sustain their interest.'' Sustaining the push Cofitos, priced at Re 1 apiece, faces a threat not so much from Cadbury's Mocka and Nestle's Koffee as Parry Confectionery's Coffee Bite. The giant brand is muscling its way into newer markets in smaller towns after having penetrated 70 per cent of the relatively big cities. Then, even as Cadbury is exiting the
low-price segment--its Mocka was withdrawn a year-and-a-half ago-it is
launching newer and marginally more expensive brands like Frutus (a chewy
sweet price at Re 1), and Gollups Neither does it seem viable for Perfetti to stay on with the low-end product segment. It discovered that in 1997 when the launch of its 25-paise Golia (coated candies) had to be postponed because the entry price wasn't viable. It is now planning to launch the brand in two flavours at 50 paise apiece. And neither does advertising pay in the face of a strong competitor. Its Brooklyn chewing gum was unable to snatch marketshare from Wrigley's, and had to be withdrawn. Pelle, however, says that such setbacks are part of the game. Perfetti is now getting into the high-end segment with Spyro (a one-metre-long bubble gum pack priced at Rs 15) and Squeezee-a soft juicy gum at Rs 25. Both are part of the Big Babol family. Simultaneously, Perfetti is tying up with speciality retailers such as Archies for promotions during festivals like Holi and Diwali. By 2003, Pelle wants to rake in Rs 400 crore in revenue. That's double of Perfetti's topline today. Yet, not even its worst critics are betting against the Italian company making it. |
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It's
hard trying to get Stepano Pelle to spend any significant amount of time
in front of the camera. In his heavily-accented English, the 37-year-old
Italy-born explains why he'd rather get back to work. But, then, Pelle's
urgency is understandable. As the confectionery-maker, Perfetti India's
CEO of two years, Pelle has a lot of catching up to do. He's fighting for
Perfetti's due share in a market dominated by industry veterans such as
Parry Confectionery, Nutrine, Joyco, Parle, Cadbury, and Nestle, among
others.