Balaji Ajay
Ann
Anupama
Apeksha
CONFECTIONERIES GROUP 1
CURRENT ECONOMIC
TRENDS
•U.S. and world economies in recession
•Stock market declines 30% plus
•Retail sales decline in second half of 2008
•Housing market bubble burst
•Unstable oil prices
•Year ends with historically low interest rates
•Difficult to borrow – credit crunch
•Consumer spending declines
•Commodity prices higher
INDUSTRY OVERVIEW
Confectionery includes chocolate, candy, gum
and biscuits. It is set of foods that are not only
enjoyable and gifting, but also functional in their
use.
More than 18,000 companies around the globe
manufacturer non-chocolate candy, chocolate
and gum. These companies provide
employment for nearly 600,000 people including
those whose specialties range from product
development to hand making chocolates to
sales and marketing.
The worldwide market for all confectionery
COCOA PRICES
Cocoa price per ton
2003 2004 2005 2006 2007 2008
SUGAR PRICES
U.S. Cents per pound
2003 2004 2005 2006 2007 2008
COMPANIES & PRODUCT
LINE
HERSHYS
Type Public (NYSE: HSY)
Founded February 9, 1894[1]
Hershey, Pennsylvania,
Headquarters
USA
Milton S. Hershey,
founder;
Key people
David J. West,[2] current
CEO
Chocolate and candy
Industry
manufacturer
See
Products
list of products manufactured by The Hershey Company
▲ $4.947 billion USD
Revenue
(2007)[3]
▲ $214 million USD
Net income
(2007)[3]
Employees 11,000 (2008)[3]
Website hersheys.com
■Milk Dud
PRODUCT
■U.S. licensingLINE
of Nestle's Kit Kat
Premium Chocolates:
■Cacao Reserve
■Joseph Schmidt
■Dagoba
Refreshment products:
■Ice Breakers
■Breath Savers
■Bubble Yum
MARKETING STRATEGY
o In- store Marketing
o Advertising only for new products
o Importance to local preferences
BUSINESS FINANCIALS
•Hershey's sales have stagnated since 2005 as
competitor Mars has eaten into Hershey's
share of the US chocolate market.
•In 2008, the company posted $5.13 billion in
revenue, a 3.8% increase from 2007.
•Hershey expects annual savings of $190
million by the time the project is completed in
2010.
PRODUCT SALES
•The U.S. accounts for the lion's share of
Hershey's sales
•With 90% of its sales in North America,
Hershey's production facilities are primarily
located in the U.S., Mexico and Canada.
•The McLane Company, distributor to Wal-
Mart Hershey's largest customer, accounting
for 26% of sales in 2007.
•Rising Commodity Costs Pressuring Margins
•Growing Global Demand Makes International Expansion
Attractive
•Premium and Dark Chocolates are Fast Growing Segments
•Competitive Pressure Calls for Higher Ad Spending
•Restructuring Initiative Promises Increased Savings
Public (LSE: CBRY,
Type
NYSE: CBY)
Founded 1889
Headquarters London, England, UK
Roger Carr, Chairman
Key people
Todd Stitzer, CEO
Confectionery and
Industry
Soft drinks
Products See products
£8.8bn (as of 11/5/2008)
Market cap [1]
Revenue ▲ £7,971 million (2007)
Operating income ▲ £1,050 million (2007)
Net income ▲ £407 million (2007)
Employees 71,657 (2008)[2]
Website www.cadbury.com
PRODUCT LINE
o Chocolates:
• Dairy Milk
•5- Star
• Éclairs
• 5- Star Crunchy
• Perk
• Picnic
• Bournville
• Fruit and Nut
• Flakes
o Candy, gums and mint:
• Clorets
• Halls
•Bubbaloo
MARKETING STRATEGY
o The Idea- “For the kid in all of us”
oThe Communication- The real taste of life
o Localization of the brand
oProduct packaging with the aim of serving specific
wants
COMMITMENT TO BRAND INDIA
Bonding 68% 8%
Advantage 84% 64%
Performance 85% 77%
Relevance 89% 84%
Presence 100% 99%
BUSINESS
TRENDS
•Cadbury Schweppes PLC (CSG) is a leading global company in the
confectionery and beverage market.
•The acquisition of Adams Confectionery for $4.2 billion from Pfizer
on March 30, 2003 was a major strategic move.
•Cadbury Schweppes is leveraging the combined operations and
routes-to-market in order to drive down costs.
•In North America, the company integrated its systems with Adams.
•The acquisition of Adams resulted in management rescinding its
performance goal of at least 10% earnings per share growth
annually due to the dilution of the acquisition.
•On June 19, 2007, management announced the Board's decision to
divest the company's Americas Beverages business, leaving Cadbury
almost entirely a confectionery company with minimal beverage
Type Public (SWX: NESN)
Founded Vevey, Switzerland (1866)
Founder(s) Henri Nestlé
Headquarters Vevey, Switzerland
Area served Worldwide
Peter Brabeck-Letmathe (Chairman
Key people )
Paul Bulcke (CEO)
Industry Food processing
Baby food, coffee, dairy products,
breakfast cereals, confectionery,
Products
bottled water, ice cream, pet foods,
more...
Revenue ▲ US$ 121.103 Billion (2007)
Operating income ▲ US$ 16.917 Billion (2007)
Profit ▲ US$ 11.990 Billion (2007)
Total assets ▲ US$ 129.106 Billion (2007)
Total equity ▲ US$ 61.067 Billion (2007)
Employees 276,050 (2007)
Website Nestle.com
BUSINESS OVERVIEW
•Nestle SA is the world's largest food and beverage company, with
2007 sales of over 107 billion CHF ($89.9 billion).
•Nestle owns several major consumer brands such as Stouffers,
Nescafe, Kit-Kat, Carnation, Nestle Water, and many others.
•Nestle is one of the most geographically diverse of the major food and
beverage companies.
•Although it already occupies the top spot in terms of sales, Nestle is
attempting to continue sales and margin growth by increasing the
nutritional value of its products- most recently it has promoted the
health benefits of its chocolate.
•To this end, Nestle created the largest research and development
network in the industry, employing over 5,000 scientists and
technicians. As retailers push private label products, the ability to earn
and maintain shelf space at groceries, convenience stores, and other
PRODUCT LINE
o Milk Chocolate
o KITKAT
o KITKAT Crunchy
o Munch
o Munch Pop choc
o Milky Bar
o Bar- One
o Polo
MARKETING STRATEGY
oBranding Strategy: Localization and Regiocentric
management orientation
o Integrate with the cultural and tradition of place
oProduct Positioning: Earn consumer confidence
o Pricing: Keep the price per unit almost same across the
countries
o Promotion: Advertising as well as packaging play a
major role
TRENDS AND FORCES
•Changes in Raw Food Prices put Nestle's Margins at
Risk
•Consumers Demanding Healthier Foods
•Strong Swiss Franc Hurts Nestle's Sales
•Melamine Contamination Scandal Drives Down
Type Public (NYSE: KFT)
Founded 1903, Chicago, IL
Headquarters Northfield, Illinois, USA
Key people Irene Rosenfeld, CEO
Industry Food Processing [1]
Products See brands listing.
▲ $37.241 Billion USD
Revenue
(2007)
▲ $2.590 Billion (2007)
Net income
7.0% profit margin
103,000 (December 13, 2007
Employees
)
Website www.kraft.com
BUSINESS OVERVIEW
•The company is now the largest North America-based food and
beverage company and the second largest in the world after Nestle.
•From 1988 to March of 2007, tobacco giant Phillip Morris Company,
now Altria Group and grew Kraft Foods, merging the food company with
Nabisco and General Foods. Altria Grouptook Kraft public in 2001,
maintaining an 88.1% stake in the stock until the completion of the spin
off in 2007.
•Kraft conducts business in two main segments: Kraft North America
Commercial and Kraft International Commercial
•Kraft manufactures and markets packaged food products, consisting
principally of beverages, cheese, snacks, convenient meals and various
packaged grocery products.
TRENDS AND FORCES
•Detrimental Supermarket Consolidation
•Increasing Raw Materials Prices Hurt Earnings
•Strengthening Dollar Benefits Earnings
•Product Recalls Hurt Both Reputation & Earnings
•Growth in Emerging Markets Stimulates Demand
•Rising Demand for Organic Foods Hurts Kraft
Type Private
1911 in
Tacoma, Washington,
USA
Founded
1920 in
Minneapolis, Minnesota
, USA
6885 Elm Street,
Headquarters
McLean, Virginia, USA
Frank C. Mars
(founder)
Key people
John Mars (chairman)
Mars family (owners)
Confectionery
Industry
manufacturing
Mars · M&M's ·
Milky Way · Bounty ·
Products Snickers · Twix · ·
Pedigree · Uncle Ben's
· Skittles
Revenue US$25 billion (2007)[1]
Employees 48,000 (2007)[1]
Website mars.com
PRODUCT LINE
oMars Bar
o Bounty
oSnickers
oTwix
oM&M’s
oDove
oSkittels
o3 Musketeers
oBalisto
oFlyte
oKudos
oLockets
oMalteser
oM-Azing
oMilky Way
oMinstrels
MARKETING STRATEGY
o Localizing the product
oLocalizing the packaging decision
oLocalizing advertising and promotion
oLocalizing and strengthening the brands
o Positioning of chocolates as good for health
Type Private
Founded March, 2001
Headquarters Italy, Netherland
Ambrogio and Edigio,
Key people
founders
Confectionery
Industry
manufacturer
See
Products list of products manufactured by The
Perfetti Van Melle
Revenue € 1,832 million
Employees 14,000 (2008)
Website perfettivanmelle.com
PRODUCT LINE
•Alpenliebe
•Center fresh
•Center shock
•Fruitella
•Chloromint
•Happydent
•Protex
•Marbles
•Mentos
BUSINESS OVERVIEW
Perfetti Van Melle is a European global manufacturer of
confectionery and gum. It was formed by the 2001
merger of Perfetti of Italy with Van Melle of the
Netherlands, having its corporate headquarters in Lainate,
Italy and in Breda, Netherlands.
Perfetti Van Melle bills itself as the third largest
confectionery manufacturer in the world after Cadbury plc
and Wrigley. It employs 14,000 people via 30 subsidiary
companies and distributes its products in over 130
countries.
The company owns a major subsidiary in the United States
(Perfetti Van Melle USA) as also in several other large
STRENGTH
•Quality
•Innovation
MARKETING STRATEGY
•Understanding of the market and its trends
•Ability to identify and anticipate consumer tastes and
demands
•Innovative and attractive initiatives
MARKET DRIVERS
•Individualism in FMCG
•Exploitation of the adult audience
•Competition with snacks
•Changes in the retail environment
"Kuch
Meetha
Ho
Jaaye..??
"
