Recent reports suggest that Cadbury is to launch a Roses Luxury Collection later this year. By adding a premium brand to its chocolate portfolio, Cadbury would hope to tap into the growing market for high quality confectionery. However, its greatest chance of success lies in improving margins from current Roses consumers rather than attracting customers away from other premium chocolates.
Cadbury is best known in the UK for mainstream brands ranging from Creme Egg and Dairy Milk bars to boxed chocolates like Heroes and Roses. A more upmarket Roses product would include both the Roses and Cadbury’s logos and reflect Cadbury’s well-established purple colouring, but would differ from the mainstream brand by having unwrapped chocolates in a single-tier box. The new product would offer a more luxurious range of flavours, including cappuccino and champagne truffle.
The prestige confectionery market offers an attractive opportunity for business. The market has seen huge growth in recent years, as demonstrated by the rising demand for organic produce and the rapid expansion of Thornton’s quality chocolatiers in the UK.
Despite being the confectionery market leader in the UK, Cadbury currently has no product offering in the premium market. An entry into the prestige market would redefine the Cadbury brand image and enable the company to target an even broader spectrum of consumers. The higher margins experienced on luxury chocolates, combined with Cadbury’s vast buying power potential, would also enable the company to reap greater profits than smaller competitors in the prestige market.
However, it remains to be seen whether Cadbury can successfully position itself as a provider of both mass market confectionery and high quality chocolates. Cadbury’s mainstream competitor Nestlé has already attempted to enter the prestige chocolate market with limited success. Nestlé launched its Double Cream bar 18 months ago, and has since relaunched the product and reduced the price to improve sales.
The success of Cadbury’s Luxury Roses is likely to lie in aspirational purchasing by current Roses consumers, rather than by attempts to pull customers away from luxury chocolatiers.
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