Kraft's wide portfolio very relevant to India: Cadbury

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Kraft's wide portfolio very relevant to India: Cadbury

In an exclusive interview with CNBC-TV18 CY Pal, Non-Executive Chairman at Cadbury India spoke about the company’s India plans going ahead.

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Excerpts from Your World at 10 on CNBC-TV18 Watch the full show » RELATED NEWS Kraft bid hurts patriotic pride of Cadbury workers Kraft takeover: Cadbury brand in India to stay ALSO READ See latest News about Cadbury See previous management interviews See what other Experts & Brokerages are saying about Cadbury Cadbury BSE | NSE 01/01/70 Are Mutual Funds betting on Cadbury?

In Cadbury, Kraft will acquire not just an iconic global brand, but one that enjoys an entrenched position in emerging markets like India. Cadbury is estimated to control almost two thirds of the Indian chocolate market and a third of the confectionary market here. A market where per capita consumption is still very low and hence growth potential is very high and a market in which it enjoys a strong distribution network.

Kraft has yet to make those inroads in India. So did India play a big part of why Kraft wants Cadbury?

In an exclusive interview with CNBC-TV18 CY Pal, Non-Executive Chairman at Cadbury India spoke about the company's India plans going ahead.

Below is a verbatim transcript of the interview. Also watch the video.

Q: A hostile deal that has turned almost friendly after months of negotiations and an increased offer?

A: First of all, while the deal is nearly there but it is still to get formalized but assuming that it gets formalized. Cadbury is an iconic brand in India and in the world actually. In India we are particularly very strong; we are the market leaders. In the Kraft's strategy India definitely has played an important part so if this whole thing goes through I am sure it will add to the Cadbury's strength in India because Kraft has got a wide portfolio - cheese, biscuits and many other things, which are certainly relevant to India and it will provide them with a ready good distribution base, marketing expertise and the Indian knowledge to go forward.

Q: Not just an important part but maybe even a pivotal part. Do you think India was a big part of why Kraft was attracted to Cadbury?

A: Certainly, I think in the Kraft's strategy for going in for Cadbury is basically because of number of countries in which Cadbury is strong and India is certainly one of them and that's an important part of Kraft's strategy.

Q: Cadbury is synonymous with chocolate in India. What impact will this combination with Kraft have on the Cadbury brand? I know it's counterintuitive to even ask because they are acquiring Cadbury for the brand presence but do you think that they might chose to alter the brand in any fashion or do you think this could have any implications on the brand?

A: No not at all. I think Cadbury brand has got enormous strength in India and that strength will carryon. Cadbury as you very rightly said is synonymous with chocolates and that is not going to change. Kraft coming in will only strengthen and broaden the company that's the way I see it. It's too early to say but thing will unfold as we go along. But I am quite sure that in no way will weaken the Cadbury brand.

Q: Cadbury has a very strong distribution network in India. How will that have to be adapted to accommodate Kraft's wider product portfolio? Because many of the smaller outlets that Cadbury's retails through are not quite suited to Kraft. So are you anticipating any changes on the distribution end?

A: As of now we have fairly wide portfolio in India of products like Cadbury's Dairy Milk chocolate which is more sensitive to eat at the one end and Cadbury's Éclairs, which is hearty product at the other end which can go into every nook and corner of the country. So we have a very good and wide distribution system but that system may not exactly fit into Kraft's need but certainly be a great asset in going forward and doing some adaptations to meet specific product needs.