Word of mouth sends demand soaring for Pulse candy
In just six months, Pulse has posted Rs50 crore in sales and DS Group expects to cross Rs100 crore by March
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Would you pay a 50% premium for candy?
In some neighbourhoods of Delhi, consumers are, and they aren’t complaining.
Pulse, a raw mango-flavoured candy with a tangy inside, costs Rs.1, but the supply is so low and demand so high that roadside kiosks stocking it are demanding and getting an extra 50 paise apiece.
Noida-based DS Group, the makers of Baba chewing tobacco, Pass Pass mouth freshener and Rajnigandha paan masala, launched the candy in just three states—Rajasthan, Gujarat and Delhi—in April in a test-marketing drive. It extended the pilot to parts of Maharashtra last month.
Demand is off the charts and the company is able to meet only about 60-70% of it, said Shashank Surana, vice-president (new product development), DS Group.
Candy is usually bought in single pieces in India, but consumers are buying Pulse in bulk—five to 10 at one go, he said.
“We never expected this demand. Placement of Pulse initially was to test the market. We also heard of Pulse selling at a premium. Whenever we receive a report of such activities, we immediately take action. (But) certain things are beyond our control,” said Surana.
DS Group hasn’t marketed Pulse, it has carried out no promotions for the brand and it didn’t even launch it properly. What has made Pulse popular is word of mouth, supported by DS Group’s strong distribution network, according to company officials.
A 10-member team selectively pushed Pulse into the existing distribution network of DS Group, which connects more than 850,000 retail outlets across the country.
Pulse was launched under Pass Pass—the umbrella brand for the confectionery business that accounts for just about 3% of DS Group’s annual revenue.
In just six months, the candy has already done about Rs.50 crore in sales, and the company expects it to cross the Rs.100 crore mark by March, said C.K. Sharma, business head (mouth fresheners), DS Group.
To be sure, that’s a minuscule part of the Indian market. Candy sales are estimated to cross Rs.5,500 crore in 2015 in India, according to a study by market research firm Euromonitor International.
Italian company Perfetti Van Melle India, which sells Alpenliebe, Chlormint, Mentos candies and Happydent chewing gum, leads the market with more than Rs.2,000 crore in revenue. Home-grown firms Parle Products Ltd and ITC Ltd also have a presence in the confectionary space. ITC makes Candyman and Mint-O, and Parle Products makes Kismi bar and Melody toffees.
Pulse was conceptualized sometime in 2013, and an internal team dedicated for product development worked for almost two years on it.
“During our research we realised that kachcha aam (raw mango) is a flavour that is eaten by people across India in some form or the other, and is a flavour that is most popular across all age groups. We also got the insight that kachcha aam is eaten with a mixture of salt and spices to add more flavour to it. We pulled the insights together and started working on creating a product out of it,” said Surana.
Following its success, DS Group is now getting even more aggressive with its plans for Pulse. It plans to launch it in all the top cities and towns over the next three months.
DS Group has tied up with four contract manufacturers in Hyderabad in Telangana, Rudrapur in Uttarakhand and Ahmedabad and Jamnagar in Gujarat to produce Pulse.
“It is difficult to predict demand at the moment. We’ll spread wings depending on how we manage to increase production,” Surana said. At present, DS Group produces 300-400 tonnes of Pulse candy every month.
Once Pulse reaches most top towns, DS Group plans to start promotions and a brand-building exercise.
“Pulse came as a disruptor into the market. But, the presence is too limited. Pulse received a good acceptance, and then a supply shortage was created. It is a good marketing trick,” a senior executive at a Mumbai-based consumer packaged goods company that has a presence in the confectionery space said, asking not to be identified.
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