Cadbury is looking to build on its dominant position in India’s chocolate market by making the country a regional centre for cocoa production.
The UK-based producer of brands such as Cadbury’s Dairy Milk and Bournville said India was proving one of its most resilient markets, with profit continuing to grow at about 20 per cent a year and sales at 30 per cent – in spite of the global recession. ‘Cadbury should be in a position to sustain the growth we have had in the last three years’, said Anand Kripalu, president, Asia and managing director of Cadbury India.

The challenge for Cadbury, which has been in India for 60 years, has been to change cultural habits in a country that has traditionally not eaten chocolate.

Cadbury has also been forced to become more self-sufficient in cocoa beans in India than in other countries because of a 30 per cent import duty on the commodity, mostly grown in Ghana and Ivory Coast. The company hopes to source all of its beans domestically by 2015 rather than from the traditional overseas markets, which are also less politically stable.

Cocoa seedlings grow alongside coconut palms in southern India and, therefore, do not require fresh clearing of forests for plantations.
Cadbury believes that, if it can persuade 20 per cent of Indian coconut farmers to include cocoa trees in their plantations, it could increase national output of the beans from 10,000 tonnes to 150,000 tonnes a year, or 3 percent of world production, by 2020.

‘As a company, we believe we want to derisk cocoa’, said Mr Kripalu. Cadbury controls more than 70 per cent of the chocolate market in India with a presence in 1.2m stores while Nestlé controls about 25 per cent. Annual revenue is about £200m, small compared with the UK but growing rapidly. This growth has come partly through extensive advertising campaigns, including ‘Celebrate with Cadbury Dairy Milk’ in 2004.
This was aimed at convincing Indians to eat chocolate alongside traditional sweets, known as mithai, which are made of milk, sugar and flavouring.

They are eaten by Indians to celebrate or to mark an event. Cadbury’s light-hearted ads in India show a middle-aged man who is celebrating after finally passing his final grade at school. ‘Bringing a cultural context to chocolates by associating with traditional sweets & occasions’ is how Cadbury describes the message of the ads.

Questions

1. W hy does Cadbury want to persuade Indians to eat chocolate?

2. H ow did Cadbury proceed in order to reach its goal?