Domestic candy makers compete against imports

- POST REPORT, Kathmandu
Domestic candy makers compete against imports

Jun 28, 2015-

Local candy makers have been trying to elbow into Nepal’s growing confectionery market which is dominated by imports in all the segments ranging from small candies to premium chocolates.

Sujal Foods, a major player in the country’s confectionery market for the last four decades, has launched a new chocolate named Chocofun-Big Fun. Chocofun, which was introduced 15 years ago, is the pioneer in the wafer segment in the Nepali chocolate industry. “As we want to expand our portfolio in the market, we have launched this product,” said Mahendra Shrestha, deputy general manager of Sujal Foods. 

The company manufactures wafers, toffees, candies, bubble gum and stick gum under brands like Chocofun, Sujal Gum, Sujal Eclairs, Candyman, Fresho and Lovebirds. “We launched Chocofun, which is primarily targeted at children and youths, as a stepping stone for other segments. We are planning to roll out other premium chocolates targeting adults too,” added Shrestha. 

Although chocolate consumption has been increasing, local companies are small in size and unable to fulfil the demand of adults who are the largest buyers. Traders said that there was more potential in this segment for new companies while the existing companies could come up with a new range of products. 

According to traders, Nepal’s confectionery market is worth more than Rs5 billion annually and growing at the rate of 10-15 percent. Imported chocolates account for more than 60 percent of sales. Foreign brands like Dairy Milk Cadbury, Mars, Snickers, Galaxy, Schmitten and Hoppits have a strong presence in the premium chocolate segment. 

Umesh Poudel, a retailer at Tinkune, said that most of the chocolates he sells are imported products. “Consumers prefer imported chocolates as Nepali products lack quality and they have also been making inroads into the adult market,” he said, adding that there was an opportunity for Nepali brands if they come up with quality products. 

While some companies have been struggling hard to compete with foreign brands in the fast growing confectionary market, some companies have shut down. Bhagawati Confectionary, a subsidiary of the MS Group which used to manufacture candies, toffees and bubble gum, went out of business a few months ago. 

“It is very hard to compete with foreign brands even in the small candy segment,” said Devi Poudel, an administrative and marketing official at the MS Group.” She added that although Nepali companies had been focusing on quality products, they had not been able to convince local consumers. “We used to manufacture Kachcha Aanp candy, but customers used to go for Kachcha Aam manufactured by Parle India although they cost the same,” said Poudel.

Published: 29-06-2015 08:27

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