South Korean confectionery maker Orion, which entered India last year in January through the import route is expanding its distribution as well as product portfolio in the country, intending to grab a larger share of the confectioneries market pie. The company on Tuesday announced the launch of two new products O’Rice and Custas Cup Cake from its global portfolio in India.
With the new launches, the company is now competing with FMCG majors who have a presence in the snacking and bakery segment such as Britannia, Mondelez India and ITC.
“While we believe that choco pie has a lot of potential as a category, we are also cognizant that if we have to be a player of significant size and stature, in India, we need to get into other categories as well,” Saurabh Saith, CEO, Orion India told Moneycontrol.
The company is also expanding its presence in the market and aims to onboard overall 600 distributors in the next six months to have a presence in the top 100 cities of the country. Currently, it is present in 30 cities in North India.
“We plan to enter metro and tier II cities in the South and West of India now,” said Saith.
The market for ‘pie’
Orion, though a prominent player in the chocolate pie category in countries such as South Korea, Vietnam and China is a late entrant to India, where another Korean company – Lotte Choco Pie – has been present for more than a decade.
Saith believes there is room enough for two brands in the category.
“The category is today sized at about Rs 300 crore largely dominated by one player. However, with increased choices as we enter the market, the category will grow at a faster pace than its 9-10 percent current growth rate,” said Saith.
The company has given all its products including the recently introduced rice crackers and cupcakes a premium positioning in the Indian market. Orion O’Rice has 14 packets of two rice crackers in one pack priced at ₹140, whereas Orion Custas Cup Cake has six cupcakes in one box priced at ₹99. Its Choco Pie is priced Rs 150 for a pack of 12 pieces, higher than Lotte Choco Pie’s Rs 140 price point.
The company aims to target metro and tier I, II consumers for its products and e-commerce is an important part of Orion’s strategy. Currently, the company commands 25 percent of its business from online platforms.
Accounting for taste
Orion has tailored its products to suit the Indian palate and is offering a vegetarian product in the country. “We had to make a lot of changes in our formulations and we are not using gelatine and eggs for making choco pie in India,” informed Saith.
“Similarly, our rice crackers have a sweet and salty flavour and we have ensured that neither is too accentuated in the country,” he added.
While the recent launches are being imported from Orion’s production facilities in Vietnam, it has set up a production plant in Rajasthan for chocolate pie.
“We started with just two stock-keeping units (SKUs) of choco pie that were imported in Jan 2020. We have grown 400 percent and now have four SKUs of choco pie that are completely made in India,” informed Saith.
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