The Italian confectionery major Perfetti Van Melle after a high-growth trajectory in India in 2019 end ran into a bump in 2020 with the pandemic but even with 80% of the sales happening in Rs 1 product range and the chief customer - young children locked at home up and schools only partially open, Rajesh Ramakrishnan, Managing Director, Perfetti Van Melle India (PVMI), shares, “We have come back to 90% plus of pre-COVID level because kids still want to consume candies and gum whether at home or outside, it’s just a question of somebody going out and getting it for them.”
In an exclusive interview with IndianRetailer.com, Rajesh Ramakrishnan shares how Perfetti Van Melle India will beat the pandemic. “In 2020 turnover for PVMI that controls 25% of the overall candy market in India was about 100 million INR but Confectionary is an impulse buy So, it also bounces back quickly. We will be back to pre-COVID levels if not more in the early months of 2021.”
What Consumer trends emerged strongly
Rajesh shares three consumer trends that strongly emerged from the year 2020 and would form the basis of PVMI’s business strategy in 2021.
Power of the brand: During the pandemic, Consumers have been gravitating towards the brand they trust. In a way, it is like during the crisis you tend towards the people you trust, so it’s the same. PVMI has strong, trusted brands in the country like Center Fresh, Center Fruit, Happy Dent, and Mentos that has kept the business ethos strong.
Value offering: The other thing which consumers look for is value during downtimes. Since there are economic uncertainties and probably less money to spend, value has been redefined,
Healthy Alternatives: Specifically for F&B products, whether it is immunity building or nutrition hygiene and health are noteworthy now. Food Fortification has been a major push factor for PVMI. For example, Perfetti had launched candies in orange and mango flavors with Vitamin-C and fruit juice in July 2020 which is doing well- Alpenliebe Juicyfills.
THE SHIFT TO DIGITAL - SMALL BUT NOTEWORTHY
Ecommerce for confectionary and candies has almost been almost non-existent prior to the pandemic shares Rajesh. We probably sold a few bags here and there. We initiated digital business with Big Basket, Flipkart Supermart, Grofers, Amazon, Milkbasket, Swiggy & Ferns, and Petals in 2019-2020
Platforms like Big Basket and Grofers form a sizeable share (greater than 60%) in the scheduled Grocery delivery space. However, the share of Confectionery within the online grocery space has been negligible. By partnering with eCommerce marketplaces, PVMI not only added to the top line but also created a niche for the category. Some development initiatives like Candy Store, Halloween Store, and Candyland on these platforms have created a lot of excitement for Perfetti Brand categories and resulted in shopper transactions growing up to 5 times. Now Perfetti India plans to work with as many players as possible because there are opportunities that exist. Going Ahead PVMI would explore business potential with alternate channels like Online Pharmacy (Ex: Pharmeasy, 1MG), Fashion and Cosmetics (Ex: Myntra, Nykaa).
Perfetti launched products in Rs 75, 100, 150, 200 multipacks that emerged as clear winners. It is about identifying consumption occasions and their digital fitment shares Rajesh. The Brand is also looking beyond the regular market towards special occasions like Halloween or Father’s Day or Valentine’s Day or Rakhi, or even Birthday return gifts to buy candy online. For targeting these occasions, Perfetti is building collaborations and synergies with like-minded brands. For example, Perfetti’s partnership with Ferns n Petals for exclusive occasion-based packs was sold out in one and half weeks, though projected for four weeks. The critical takeaway for Perfetti was to focus, understand the opportunities, and find the right partner.
Occasion campaigns for Mento’s social platforms (digital) were also linked to the eCommerce platforms in terms of consistency of messaging. This consumer campaign showcased various occasions relevant to consumption of Mentos Gum and Candies (before video calls, during binge-watching) and these were highlighted to the shopper while he/she was on the eCommerce platform to buy their favorite gums and candies. Similarly, Center fresh Mints in Q4’20 launched a digital film that showed connections that were forged virtually (during the pandemic) can be equally rewarding, uplifting, and joyous.
The learning for Perfetti India was that consistency in campaign messaging across platforms (digital & e-com) has increased the saliency within eCommerce platforms and also has been appreciated by consumers for their relevance. Ecommerce further leveraged this online by ensuring product availability buttons besides the digital film online.
Towards this purpose, PVMI India has deployed its high potential teams in charge of e-commerce for a bigger digital push. Perfetti has an excellent eCommerce business in other markets and it is time to bring those learnings and leverage them in the local market.
Taking heed from these experiences PVMI has drawn out calendars of some fixed occasions and is planning to create new occasions to get into the life of a consumer seamlessly.
BUSINESS MODELS ARE SHIFTING
Business models need to evolve because the lead times are shorter and response time needs to be faster feels Rajesh. At Perfetti van Melle, we take great pride in our consumer understanding that drives all our innovations and communications. But for digital, we need to understand things not only from a customer point of view but also from the analysis of the shopper’s journey and that’s a work in progress.
The focus is to get the right price-pack equation which ensures that the occasion is captured and at the right margins. Innovations like work-desk packs to be used in the office like gums that give you fresh breath or Holi pack or a ‘goodies box’ consisting of small boxes across brand categories as Return gifts for tapping into mainstream occasions and meeting consumer needs when they think about candy store near me.
New Business & Licensing Collaborations
During the Pandemic our thinking was what can we give to the kids that they could enjoy from the confines of the homes. The idea is to integrate our product with the life of the consumer in some way shares Rajesh. A few Chupa games where you play with our products were thus launched. Perfetti leveraged technology and developed two games where kids could play and experience the product as well.
Similarly, Alpenliebe worked on bringing family closer, a DIY digital platform was launched. It started with Rakhi encouraging families to come together and create a Rakhi with Alpenliebe and any other decorative things they wanted to use. Perfetti also partnered with influencers to create a buzz for these initiatives. The whole concept has been to leverage creativity by integrating the product.
The new normal for confectionery FMCG
Some things will stay constant while others might change feels Rajesh. The fundamental building blocks for a business will continue to remain the same. There are 4 essential building blocks- building iconic brands, continuously launching differentiated products, further building on our extensive distribution network, and last but not least, nurturing talented and passionate people.
What will change is first, consumer trends and how we tap on those trends. The point is to look for ways to tap those consumers' opportunities continuously. The second is, how to leverage e-commerce further and envision it like an online candy store. There is ample space that will see more action. The third space is digital technology. As consumers are spending more time on their gadgets, how can PVMi piggyback that in a seamless manner? And fourth is what I spoke about, occasion-based marketing. There are occasions where there is a lot of consumption of sweets, so can I seamlessly weave my business into that to capitalize it. It is an evolving landscape and that is where opportunity also lies.