Foreign brands dominate BD candy-chocolate market

FT ONLINE

Due to large-scale candy production is a relatively new venture in Bangladesh, foreign brands have grabbed a major portion of the local market.

Although food industry giants like Pran-RFL Group and Olympic Industries are stepping up production, they are prioritising exports overselling to local customers.

Nearly 60 percent of the Tk2,000-crore chocolate and candy market in Bangladesh is dominated by foreign brands, according to industry insiders. 

The presence of these foreign brands is making it difficult for local small-scale producers to grow.

Bangladesh Lozenge Manufacturing Association President Anisur Rahman Badsha informed that currently, there are some 20 factories that produce candy and chocolates in Dhaka.       

"Even 10 years ago, there were over 40 local brands competing in a Tk150 crore market," he said, adding that foreign brands are discouraging local entrepreneurs and driving them away from the market. 

Nabisco and Haque Group, two popular local brands, gradually shut down their candy business over the last couple of years, Badsha said. 

Holding the illegally imported foreign candies and chocolates responsible, Nabisco sales official Joynul Abedin said the company shifted its focus to biscuits as profits from candy and chocolates were drying up.

Chocolate-candy market 

The rise of the middle class in the last two decades leads to an increase in demand for candy and chocolate in Bangladesh. The market ballooned up to over Tk2,000 crore during the period with an annual growth of 12-15 percent.       

Moreover, increasing urbanisation and affordability of the product fuelled the expansion process. Pran-RFL currently leads the candy market in terms of sales.

Pran has been producing candies, lollipops and bubble gums since 2000. Its green mango flavoured Mr. Mango candy is the most popular brand. 

Other candies in their line-up include lollipops and mint flavoured candies. Although all of its products are low-priced, the company had more than Tk500 crore turnover in 2018.

Pran-RFL Group Director (Marketing) Kamruzzaman Kamal said that their position is at the lower-end segment as the foreign brands easily enter the country.

"However, our position in the international race is good. We focus on import rather than competing in the local market," he added.

Perfetti Van Melle, the Italy-based company is the second most popular candy brand, which produces candy locally. Its sub-brands include the popular Alpenliebe, Mentos, Center Fresh, Center Fruit and Juzt Jelly candies and chewing gums. 

Perfetti Van Melle is the third largest sugar confectionery producing company in the world. Although the company largely depended on imports, it went into large-scale production and set up a factory in Gazipur in 2006.

Olympic Industries is the third most popular brand in Bangladesh. Apart from making biscuits, the local manufacturer produces candies of different flavours including litchi, green mango, pineapple, ripe mango, juicy orange, tamarind, spicy tamarind, milk, creamy caramel and mint.

As an individual brand, Olympic Pulse is the most popular candy brand in Bangladesh. The company says it sold more than Tk100 crore of the product in 2018.

Claiming Pulse as a huge success, Olympic Secretary Md Najim Uddin said they had been emphasising product diversification in the last couple of years.     

Other local brands like Partex Group's Danish Green Mango, Danish Litchi, Danish Rich Milk Caramel, Danish Milk Candy, Danish Pineapple Candy, Monceri Milk Candy of Globe Food and Beverage, Candy Coffee and Black Horse are also available in the market.

Foreign chocolate brands

Foreign popular candy and chocolate brands have flooded confectionaries and super shops though there is no widely known importer in Bangladesh, except Nestle Bangladesh and Transcom.

Brands like Dairy Milk of Cadbury, Kit Kat of Nestle, Snickers of Mars and Ferrero Rocher are common at confectionaries and department stores. Dairy Milk of Cadbury is the most popular among these, said Agora Super Shop Marketing Officer Arif Hossen.

"Nearly 90 percent candies we sell are foreign. These come from India, Thailand, Myanmar and Malaysia," he added, claiming they always purchase from verified importers.

Bangladeshi chocolate in foreign markets

Although Pran-RFL and Olympic Industries are weak players in the local market, they are competing in foreign markets.

According to Export Promotion Bureau data, candies worth around Tk352 crore were exported in the 2018-19 fiscal year. The exports were mostly to the Indian, Middle Eastern and African markets.

Kamruzzaman Kamal, director of Pran-RFL – which exported around 80 percent of the total consignment last fiscal year, said their growth in exports was more than 20 percent.

"Foreign markets are safer hotspots for us," he said.