MARKET
Chocolates – like ice cream, toothpaste and milk powder – have universal appeal across all demographics and cultures. But unlike toothpaste and milk powder, chocolate is not considered an absolute necessity; nor is it endorsed by opinion leaders. In fact, dentists and nutritionists often ‘de-market’ the product – especially since it is perceived as being a product that is generally not suitable for children.
Despite these constraints, the Western influence of chocolate as a snack, reward or gift has gained universal acceptance. The habit of chocolate being given as a gift between loved ones, friends and relatives is widespread – and in this respect, chocolate often triumphs over flowers as the gift of choice. The best evidence of this is on Valentine’s Day, seasonal and religious events such as Christmas and New Year, and birthdays and anniversaries. Chocolate is also a popular impulse item, where purchasing is influenced by visibility in stores and by packaging.
The Sri Lankan chocolate market has been dominated by many local players. But Kandos is the undisputed market leader, enjoying a 56% market share. The total imported brand share is less than 5% in Sri Lanka, which is unusual considering the fact that India as well as other markets in the region are being dominated by foreign brands, which account for more than 90% of their chocolate brands.
Kandos, however, has a strong base. It was the premier chocolate long before foreign competitors and local imitators arrived on the scene. The local consumer has been exposed to the unique taste of Kandos for the past 44 years, thereby ensuring brand loyalty. The market is now quite sophisticated, with many pack designs, display configurations, chocolate flavours and pack sizes on offer. The Kandos brand has recognised the value of segmentation and it reaches each market segment in unique ways. All this has combined to make it not just a successful Sri Lankan brand, but a Superbrand.
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ACHIEVEMENTS
Kandos has maintained a clear market-leader status in the chocolate segment in Sri Lanka throughout its four-plus decades in existence. It is the first transnational company in Sri Lanka to have multiple bases of production in countries such as Singapore, Malaysia, Indonesia, Thailand and, of course, Sri Lanka.
Presently, Kandos has a mind share of over 90% in the chocolate category in Sri Lanka. It has thus become the benchmark for chocolates in Sri Lanka. In a highly competitive market scenario, with major global chocolate brands as keen contenders, Kandos has emerged as the undisputed market leader in the chocolate category. This is a noteworthy achievement for a South Asian brand, since many neighbouring countries such as India, Bangladesh and Pakistan are dominated by foreign brands. In Sri Lanka, foreign brands account for less than 5% of the chocolate market.
Kandos is the champion brand of Sri Lankan children. It is, and has been, at the forefront of noteworthy sponsorships and it has an enviable track record of backing worthy causes. A recent promotion involved the inauguration of a scholarship fund – the Kandos Reach-Out Educational Fund – to help 1,000 destitute children with their school education.
It has also been a sponsor of high-quality media programmes, especially concentrating on children and the family: for example, by sponsoring TV programmes such as Knight Rider, Amba Yahaluwo and Punchi Veerayo, and more recently, Kandos Millennium Kids – which has been renamed as Kandos Vishwa Nena Sara. These programmes have the highest viewership numbers in their allotted time slots – currently, Kandos Vishwa Nena Sara, a high-quality children’s educational programme, is the highest rated children’s programme (Source: ACNielsen).
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HISTORY
Brand Kandos was named after the hill capital, Kandy, and three of the company’s directors. The brand began flourishing in Sri Lanka after the take over of the company, Ceylon Chocolates, by the founder of the Upali Group – the late Upali Wijewardene – in 1962.
Wijewardene, a highly respected entrepreneur, turned the Kandos brand into an undisputed market leader in the chocolate category. The brand’s initial marketing campaign was along the lines of the famous Kandos Man concept. This positioned Kandos as a fun-filled, dynamic product. Soon, Kandos became the country’s first transnational brand.
Over the years, it has won the hearts and minds of Sri Lankan consumers. Today, Kandos is in an enviable position as the undisputed market leader in the chocolate category in Sri Lanka.
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PRODUCT
Kandos, from its inception, was positioned as a premium chocolate made from high-quality ingredients. It is a household brand that is synonymous with sharing, affection, love and caring. Its product range covers all possible demographic and psychographic segments. Kandos presently boasts 52 product lines, from chocolate bars, slabs, gift packs and centre fills, to cooking chocolates and cocoa powder. The most popular are milk, orange-flavoured variants, cashew and other nutty chocolates.
The premium range of Kandos is called the Kandos 21 Collection. Others in the top range are Cashew, Superblend and Reach-Out – all made from 100% Criollo cocoa beans from Sri Lanka. Sri Lanka’s Criollo cocoa is considered to be one of the finest in the world, similar in many ways related to branding and image to Ceylon Tea. And 95% of number one Sri Lankan cocoa beans harvested are used in the manufacture of the premium Kandos chocolate range.
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RECENT DEVELOPMENT
Kandos Classic, the latest addition to the Kandos range of slabs, has performed beyond expectations. Its two variants, Regular – with milk chocolate and rice crispies – and Vanilla – with milk chocolate, rice crispies and a new vanilla flavour – have now become firm favourites among young adults who constitute its primary target market.
The Kandos research and development team has perfected an absolute chocolate treat in the form of a chocolate spread. This latest innovation was launched in August 2006. Initial market sampling has proved to be extremely encouraging.
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PROMOTION
Kandos is among the top ten local FMCG brands in Sri Lanka. This has been established through a cohesive, consistent and coherent strategic advertising and promotional effort.
The main target market being children, advertising and promotions have in the main focused on this primary market.
The Kandos Magic Wiz Kids consumer campaign has continued for the last six years, and it has had unprecedented success with a category growth of 150%. Using the mechanics of collecting chocolate wrappers to form a complete family to win (using family members printed on the reverse of the wrappers), this promotion adds a subtle element of social responsibility that works well with the Sri Lankan culture. The Kandos family consists of six members (father, mother, son, daughter, grandmother and grandfather). Children who participate in this competition are reminded of the fact that their grandparents are also an integral part of the family, a feature that has been highly commended and appreciated by the general public. This campaign has gained the brand loyalty of more than 500,000 children within the last six years. It is the longest running consumer campaign with the largest number of winners in the history of the FMCG sector in Sri Lanka.
The Kandos Magic Wiz Kids campaign has also resulted in establishing a Kandos Magic Wiz Kids Club. Membership of this club now exceeds 100,000 children. Membership has special privileges, and it is viewed by the company as a unique tool that will ensure brand loyalty and consumer retention. It is also a means of expanding the Kandos customer base.
Kandos Millennium Kids, is an educational variety programme being aired in partnership with the Sri Lanka Rupavahini Corporation, arguably the most popular TV channel in Sri Lanka. This programme, now the highest-rated children’s programme in the country, has been recognised by leading educationists. All this has given a tremendous boost to brand image, with value additions to the brand’s core.
True to its image and standing, Kandos launched the Kandos Reach-Out Educational Fund in October 2005. The main objective of this was to provide a helping hand to 1,000 destitute children, to further their education. Unlike many other scholarship programmes, children selected as recipients of the Kandos Reach-Out scholarship receive scholarship funds until the end of their school careers. So if a child is in grade one at the time of winning a scholarship, he or she will receive funds – each month, through a bank account opened by the Kandos Reach-Out Educational Fund – until the end of his or her school career.
Funds for this purpose are generated through a special chocolate called Kandos Reach-Out. Every Reach-Out product sold contributes a sum ranging from Rs. 2.50 to Rs. 25 to this fund. More details of this innovative scheme are available at the brand’s website, www.kandosreachout.com
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BRAND VALUES
The core brand value of Kandos is the perception that it a delectable delight – hence, the positioning of Kandos as the original chocolate. The brand essence is associated with love, sharing, caring and the enhancement of family values.
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THINGS YOU DONT KNOW ABOUT Kandos
♥ On average, 100 units of Kandos chocolates are consumed every minute in Sri Lanka.
♥ The original cocoa variety Criollo, introduced to the world by the Mayans, is now available in only three countries in the world – these being Indonesia, Samoa and Sri Lanka (Source: Chocolate Cocoa & Confectionery Third Edition, by Bernard W. Minife).
♥ Some 95% of number one Sri Lankan cocoa beans are used to manufacture Kandos chocolates.
♥ Its consumer promotion, The Kandos Magic Wiz Kids, is probably the longest-running consumer campaign ever to be held. It has continued since 2000, with the highest number of winners of awards – over half a million – in Sri Lanka.
♥ Kandos is Sri Lanka’s first transnational brand.
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www.kandosreachout.com
