Monday, 6 May 2013
CEO Executive Compensation -Cadbury India-Hot Drinks
· Cadbury India is a subsidiary of Cadbury Schweppes, with Cadbury Schweppes holding a stake in excess of 90% in its local subsidiary.
· The company operates in the hot drinks and packaged foods industries.
· It has national coverage with manufacturing and distribution facilities in all four regions.
· Cadbury India is a public company and not known to be actively seeking funds to realise its growth strategies.
· The company launched Cadbury Bournville Fine Dark Chocolate from its parent company’s international brand portfolio in India in October 2008.
· The company supplies the local market through its local production units. Cadbury India has five factories, located in Thane, Pune, Induri and Malanpur in West India, and Baddi in North India. Cocoa is one of the major raw materials used by the company and is procured mainly from plantations in South India, in the states of Kerala, Tamil Nadu, Karnataka and Andhra Pradesh.
· The company exports its products to Sri Lanka, Dubai, the US and the Maldives.
· Cadbury India is not known to be involved in third party manufacturing.
· Cadbury India is the fifth largest player in the hot drinks market, with a share of 4% of value sales in 2008. The company derives this position through its malt-based drinks and chocolate-based flavoured powder drinks brands. The company’s flagship brand is Bournvita, which has been present in the Indian market for more than half a century. Targeted at mothers and children, Bournvita is positioned as a wholesome and nutritious drink helping children to grow stronger, both physically and mentally.
· The company’s share of other hot drinks witnessed a slight decline in 2008 as Cadbury’s Drinking Chocolate suffered a slight loss of share due to the presence of a large number of cheaper competing brands available in supermarkets. Bournvita continued to perform well in North and West India, with small sachets helping to drive volumes in semi-urban and rural areas. The extension of Bournvita to Bournvita 5-Star further helped the company to keep pace with its competitors in hot drinks during the year.
· Cadbury India is positioned in other hot drinks, a category which is expected to witness an off-trade volume CAGR of 4% in the forecast period. While this category is fairly mature in India, as Indians are the largest consumers of malt-based drinks in the world in volume terms, it is also very dynamic. The category has recently seen the entry of new domestic and international brands and is very competitive in terms of advertising and new product launches. Malt-based drinks have also recently witnessed a lot of product innovation in terms of flavours and consumer segmentation.
· The company has a narrow product and brand portfolio with only flavoured powder drinks products. While Bournvita is its major brand hot drinks, its other brands include Cadbury’s Delite, Cadbury’s Cocoa and Cadbury’s Drinking Chocolate.
· The company is positioned only in the high end of the hot drinks market with only premium products such as Bournvita and Cadbury’s Drinking Chocolate in its portfolio
· Cadbury India is considered an innovator as it is responsible for creative marketing initiatives such as the TV series “Bournvita Confidence Academy”. It is also known for product innovations such as the popular Bournvita 5 Star flavour variant.
Source-Euromonitor International-Local Company Profile