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CANDY AND

CHOCOLATE INDIA
Group 10
Arun
Po o j a
Pr a d e e p
Sharan
Soumyarup

134
153
156
165
172

INDIAN CONFECTIONARY MARKET


In 2010

CAGR

Expected

Revenue
Figures

INR 6.5 bn

12%

INR 11 bn
(by 2014)

Volume Figures

193 mn kg

6%

264.4 mn kg
(by 2016)
35% of total confectionery consumption supplied by unorganized
sector

Share
20%
46%
34%

Chocolate
Sugar
Candies
Gums

Growt
h

Range
(Rs.)

Outlet
s

Chocolate 20%

2 - 10

1.7 mn

Candy

5%

0.5 - 1

5 mn

Gum

9%

1-5

5 mn

CCIS RTM: RECONFIGURATION (1/2)


Before: included distributor, wholesaler and retailers.
After: 3 routes
1. Traditional Retail Route: (focused only on urban,
similar to old)

CCI

(salespeople)
Distributo
r

Served underserved
outlets, offered
promotion schemes

Wholesal
er

Retailer

Provided credit, stock


several products at
one location

CUSTOM
ER

CCIS RTM: RECONFIGURATION (2/2)


2. Exclusive Rural Route: (2007, especially villages
with population 10,000 or more)
Each superstockist had 1
salesperson to cover 40
substockists

CCI

Received from super


stockists, margin 4-5%, sold
INR 10,000 stock each
month

Distributors
,
CUSTOM
Wholesaler
ER
s, Retailers
Max. cost: INR 5,00,000 per salesperson per
year

Super salesperson Sub


stockis
stockis
t
t
Offered service to
35-40 sub
stockists

3. Modern Retail Route


Hyper markets, super markets and the army
Stock was sent to these retail outlets either directly, from
factory or local C&FA.

CURRENT SCENARIO

1500
urban
distributo
rs

50 super
stockists

1800 sub
stockists

>500,00
0 outlets

The superstockist and substockist model has been


successful in small towns with population of 10,000 or
more.
More than 1,500 villages directly served
CAGR in terms of retail presence grew by more than 7%

PROBLEM IDENTIFICATION

To have a cost effective and efficient Route-tomarket model that increases penetration in rural
market

ALTERNATIVES
Option 1:
Option 2:
Option 3:
Option 4:
Option 5:
Traders
Option 6:

Superstockist Model
Haats
Van Sales
Micro entrepreneurs SHGs
Micro Entrepreneurs Mobile
Tie-Up with India Post

OPTION 1 : SUPERSTOCKIST MODEL


Villages <10000 (pop.)
Villages >10000 (pop.)
Villages
Substockist
Villages/Substockist
Superstockist (1 per 36 sub)
Sales Person (1 per super)
Expenditure on sales person
(million Rs.)

Existing Required
1466
2495
1800
3065
0.81
50
85
50
85
25

42.5

Number of Villages
Targeting
Total Villages
Villages with >16 retailers
>10000 :villages/substockist
Average Population of a village
<10000: Villages/Sub-stockist
(assumption)
Sub-stockists required
Superstockists
Sales person
Cost for company (million Rs.)

Existing
593615
50%
296808
148404
0.81
1183

For villages with pop <10,000


Cost of implementing this model very high
High Number of extra sub-stockists needed

So, use this model to expand only in villages with pop >10,000

7
21555
599
599
299.4

OPTION 2 : HAATS MODEL


Only 33% of villages have road connectivity
Use Van activation in these haats
Market Potential
Number of Villages
Villages/Large Haats
No. of large Haats
No. of visitors/Haat/day
Total visitors/day
Confectionary expenditure (10% of Rs.40)
Expenditure on CCI (15% Market Share)
Total Revenue/week (in million Rs.)

Villages
>10000
3961
60
66
12000
792200
4
0.6
0.47532

Villages
<10000
593615
20
29681
5600
166212200
4
0.6
99.73

Expenditure on Activations
Van cost/day
Total days for Large Haats (1 van for 1 Haat)
Total days for Small Haats (1 van for 3 Haats)
Haats accessible by road
Total Haats covered by vans
Total activation cost/week (in mn Rs.)

3500
66
9894
3265
3331
12

OPTION 4,5 : SHG, MOBILE


TRADERS
SHG
No. of SHG (million)

Mobile Trader
7

Target

1.0%

Targeted SHG

0.07

Avg, Monthly Revenue/SHG

2000

Total Monthly Revenue (million)

140

Cost/month
Total villages
Do not have roads
Villages covered
Villages covered/month
No. of mobile traders
Cost of mobile traders (million
Rs.)

1500
593615
67%
391786
54
7255

Use SHG/ Mobile trader model to target those villages having no


road connectivity (67%)

11

FINAL RECOMMENDATION
Villages > 10,000
pop

Villages < 10,000


pop
With roads
(33%)

RTM
Activatio
n

Superstockist
model & Haats

Haat

Van models in
Haats

Van model

Without roads
(67%)

Mobile
traders