Industry spectators have said that Hindustan Lever’s (HLL) expected entry into the confectionary market may come as early as next month, but Industry sources have dismissed the idea that HLL will acquire a smaller brand.
The company is launching a sugar boiled product at a low price point to rival the market shares of existing players in the Rs 1,200 crore confectionary sector. The launch is expected to prompt a price war, as HLL’s candy will be priced around 50% lower than the similar products manufactured by Cadbury, Parry’s, Wrigley’s, Nestlé, Candico Perfetti and Warner-Lambert.
This price already exists in the unorganised sector, but is expected to bring changes to the more established players. Analysts do expect HLL to revise its pricing strategy in time however.
A spokesperson at HLL explained the importance of confectionary to the company: “HLL has identified certain core sectors as possible growth areas. These are confectionery, water, consumer healthcare, e-based opportunities, direct-to-home distribution and a rural business model. We will test out our plans thoroughly before going whole-hog into any sector.”