The final acquisition of UK’s leading confectioner Cadbury Plc by US-based Kraft Foods Inc for USD19.7 billion has offered Kraft Foods a ready revenue base and a large distribution network in India, which reaches out to about one million outlets, including a wide network of traditional grocery stores and modern trade channels.
This acquisition will help the US food major strenghten its foothold in the country, where it had relatively minsculed presence with concentrated drink powder Tang, chocolate brand Toblerone and biscuit brand Oreo. Tang was introduced as a mass product while the other two brands were launched to cater to the premium segment of consumers.
The confectionery market can be segregated into chocolate, gum and sugar confections, with Cadbury considered to be holding 70 percent market share in chocolates segment. Now with Cadbury acquisition, however, Kraft has got instant access to the mass chocolate and confectionery segment in India, an opportunity to mark its presence at both the mass and premium ends of the spectrum.
Globally Kraft has a brand portfolio spanning across categories such as snacks, beverages, cheese, grocery and convenient meals. It is known that Kraft will now utilise and capitalise on Cadbury’s strong market position and distribution network to foray in the other food category in the county as well.
Going by the prevailing market scenario, it is clear that Kraft will be faced with a fierce competition in the processed food space with the existing dominant players such as Nestle India, Hindustan Unilever, Amul, Britannia etc in various categories.
— IndiaRetailing Bureau