US-based Mars Wrigley is planning to further boost its India presence with more India-focused offerings, increasing manufacturing in the country and also better retail channels. “India is a high priority market for us. Chocolates consumption in India is just 150 grams per person per annum compared to the developed world where they consume 5-7 kg of chocolates per person per annum. So there is a huge headroom for growth and we are working towards tapping that opportunity,” said Kalpesh R Parmar, Country General Manager, Mars Wrigley, India. Mars Wrigley has also stepped up its focus on going deeper into rural and semi-rural markets with lower price variants of its product, while also ramping up distribution in these regions. Tanya Krishna of FinancialExpress.com interacted with Kalpesh R Parmar on how the confectionery company is striving to win in this growing market. Here are edited excerpts from the interview.
How do you see the chocolates market growing and consumption changing in India?
Ever since the pandemic people started working from home and their impulse consumption shifted to indoors. And that has been the sweet spot for us and slowly we became relevant from the snacking perspective as well. According to industry data, the chocolates category is a Rs 11,000 crore market including molded chocolates, filled bars and wafer chocolates growing at 8-10 per cent on year-on-year basis and gums and candies is another Rs 10,000 crore market growing at 5-7 per cent in India. So between these two categories, we are looking at a Rs 21,000 crore opportunity with very low penetration and consumption.
What strategies are working for you in the Indian market?
Earlier, we were only operating in the filled bar segment but now with Galaxy chocolates, we have also entered into the molded chocolates segment which is the biggest category in India. We, as a country, are mostly a Re 1 nation when it comes to candies and gums. We were playing in the Re 1 price point for decades with Boomer. In 2021, we decided to also launch Orbit and Doublemint and even our candies at that price to increase category penetration. That’s how we have Indianised our portfolio during Covid. We have reengineered some of our products to be able to give that world class experience to consumers for the minimal pricing. Our communication strategy in India is led by three brands – Snickers, Boomer with the most sizable turnover, and Galaxy since it plays in the massive crore molded chocolates segment. Next, what works for us in India is the quality we offer – right from Rs 10 worth of chocolate to premium price point.
What percentage of sales for Mars Wrigley India comes from rural markets as compared to the urban markets? Are you strategising any plans in order to increase the share in either of these markets?
Rural has been one of the fastest growing markets for us throughout the year 2020 and 2021 and it will remain to be a growth driver for us, as consumers are increasingly finding comfort in trusted packaged food brands. We have a portfolio straddling across the pyramid and we see very strong double digit growth from the rural market in terms of contribution to the overall business.
For rural, the most important thing is to have the right portfolio. Then of course, you need a carrier brand like Boomer and Snickers, that can connect the market to the rest of our portfolio and then have the right route to market, and the right supply chain environment. India is a country with varying temperatures and supplying chocolates to various parts of the country, giving the right quality experience has been one of the challenges and hence, we have added many regional distribution centers through which we are able to supply to most of the country. We have doubled our distribution points in rural regions through the hub-and-spokes model, and we will keep increasing these over the next 6-9 months.
Which retail channel is working best for Mars Wrigley India? What percentage of sales comes from the online channels as compared to the offline?
Modern trade has started opening a lot in the past 90 days. We are seeing a pent up demand from supermarkets and hypermarkets and are registering good sales from these channels. We are also trying to give new experiences since Indian consumers have reduced their travel outside of India. So we are trying to give them unique experiences in the country – we opened M&M experience store in Mumbai’s Reliance Jio World Drive in October last year and we have achieved astounding results from that store.
E-commerce too is growing dramatically and so we use resources from our e-commerce team, on sales, marketing and even supply side. We have a concept called ‘gig workers’ where we invite specialists to come and train our team in new processes and strategies. We also restarted retail through the D2C channel where we have our own website for consumers to order and get things delivered in 2-3 days. Again, learning from quick commerce players like Blinkit and Swiggy, we are partnering with them and are getting a lot of benefits. Quick commerce is one of the perfect channels for categories like chocolates that otherwise tend to melt during transit.
How are you tackling inflationary pressure currently? Will there be a price hike by the company in the coming months?
Since we are a part of the overall Mars global ecosystem, we get a lot of support and benefits when it comes to a lot of raw materials that we source globally. This has, in the last few months, helped us manage the inflationary pressure. However, quality remains the most important parameter at Mars and in case of huge inflationary pressure, we do adjust the pricing a bit. We have already taken moderate price increases and there will be some more in the next few quarters. While we cannot zero in on the percentage of price hike, it all depends on the commodity prices in the coming months.
What are your expansion plans going forward?
We keep investing in new manufacturing facilities in India. We already started manufacturing Galaxy chocolate in India in an innovative and localised avatar, using signature recipes for Indian consumers. Refurbishing our lines like Snickers where we make a lot of variants, Doublemint and Orbit is another opportunity where we will invest in our factories in future. At the same time, we have increased our media investments a lot in 2021 and we will continue to do so, going forward.
In terms of retail channels, we are learning from our current experience store and will plan on opening such stores in future as well.