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Nov 22, 2011, 12.36 PM IST | Source: CNBC-TV18

Oreo eats into market share of Britannia, Parle, ITC

With Cadbury's in the bag, Kraft's Indian operations have kicked off on a sweet note. Its first major brand, Oreo has eaten into the market share of rivals Britannia, Parle and ITC with ease. CNBC-TV18's Animesh das finds out how the cookie crumbles.

Animesh Das , CNBC-TV18

With Cadbury's in the bag, Kraft's Indian operations have kicked off on a sweet note. Its first major brand, Oreo has eaten into the market share of rivals Britannia, Parle and ITC with ease. CNBC-TV18's Animesh Das finds out how the cookie crumbles.

Three words that have been instrumental in the making of India's second most popular brand in the chocolate cream biscuit category. In just six months, Kraft Food's Oreo has cornered more space in India's Rs 5,500 crore cream-biscuits segment, than Britannia's Treat-O managed in nine.

With market share curently at nearly 6%, it has also stolen fans away from rival brands like ITC's Sunfeast and Parle and Britannia's Bourbon. But Kraft says this is just the beginning.

V Chandramouli, Director - Snacking and Strategy, Cadbury India says, "I think the brand is still in a stage of generating trials. So to an extent this is still early stages of a brand. Most of the people who got onto the brand are really satisfied with the quality of the brand. What we see with Oreo is highly repeat rates."

Experts say Kraft India hit the sweet spot with a simple launch strategy -- introduce one product without variants, use the existing distribution network, and cash in on the strong brand recognition enjoyed by Cadbury's. Throw in introductory pricing, and Bob's your uncle.

Sunil Alagh, Founder and Chairman, SKA Advisors adds, “They took the initial pricing of  Rs 5,  Rs 10 and Rs 20 and within a short period of time, they've crossed thousand tons a month. That is fabulous for a brand with just one variant by any stretch of my knowledge of the biscuit market that is terrific and now they've taken up the price to Rs 12. They've taken up pricing because they've to start making money because low pricing gets you volume but no profits.”

Kraft now plans to hike prices by a rupee next month -- the second hike since its launch. Some experts caution that this move could pose a challenge for the world's largest selling biscuit in price-conscious India... but Kraft is certain where there's cream, there's dough.

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