Cadbury India (part of Kraft Foods) is likely to exit the sweet snacks market where it operates with Cadbury Bytes. Launched in 2004, Bytes was expected to create a new category of sweet snacking and was meant specifically for the Indian market. It was available in flavours such as caramel, coffee and strawberry in the price band of Rs 5 and Rs 10. With the tagline ‘ Snacking Ka Naya Funda ', it had appointed Contract in Mumbai to create ads to differentiate it from the usual salted snacks, and to target the youth.
The brand has been missing from the retail shelves for a while and has limited distribution currently.
When contacted, Mr Chandramouli Venkatesan, Director- Snacking, India, Cadbury India, said he did not want to comment on the withdrawal of the brand. There has been no mass media advertising for the brand and it has been missing from Cadbury India's Web site which lists all its brands.
Low-priority category
The takeover of Cadbury by Kraft Foods has led to the chocolate major de-prioritising certain categories. According to FMCG analysts, while there was no problem with the product, Bytes has remained a low-volume and low-margin business. It could not match the volumes which salted snacks brands such as Frito Lay's had garnered and gross margins have continued to be under pressure.
Besides, there were intense manufacturing costs involved with the product which might have led to lack of profits.
Now Kraft would rather have its own iconic brands such as Oreo biscuits and Tang powered drinks make money in India than promote an indigenous brand such as Bytes.
In a recent Webcast, Mr Tim McLevish, Global CFO, Kraft Foods, said, “In India our business has grown more than 40 per cent. With our recent launches of Oreo and Tang in this market, we are confident that the robust growth will continue.''
Oreo brand
This March the Oreo brand was formally launched in India with scaled down prices from its imported counterpart. The brand also embarked on a social movement through the ‘Together Quotient' to figure out the amount of time parents should be spending with their children.
“It is natural for Kraft to bring in a new portfolio and de-focus on certain existing brands. Snacks is an impulse product and if the volumes and sales targets are not met, the priorities are bound to change and there would be rationalisation of the portfolio,'' said Mr Jagdeep Kapoor, Managing Director, Samsika Marketing Consultants. Cadbury continues to be the market in leader in chocolates and has other categories such as beverages, gums and candies.