Perfetti Van Melle India, a leading player in the confectionery sector, has demonstrated robust growth through its global and domestic brands. In an interview with BusinessLine, Nikhil Sharma, Managing Director of Perfetti Van Melle India, addressed several topics, including the impact of GST reforms on the confectionery market and the company’s premiumisation strategy.
Sharma noted that the confectionery industry, particularly in the sugar segment excluding chocolates, relies heavily on impulse purchases. “The industry doesn’t set trends; it follows them with a lag,” he explained. Although there were pressures in the last year, the GST reforms announced in September have revitalized the sector. The company reported a strong growth rate of high double digits in the past six months, attributing this to the reduction of the GST rate to 5% on candies and gums, which has positively affected cost structures and allowed for further innovations.
Regarding innovation, Sharma expressed optimism for new product launches at higher price points, specifically in the jellies segment, which is expanding globally, while the Indian market is just beginning to embrace it. “We’re at the forefront of innovation with a high share in that area,” he stated. While the company still offers products at ₹1, the premiumisation effort is gaining momentum, with the ₹5 and above price point now accounting for 30% of their portfolio. Perfetti aims to increase the availability of its premium products in more than the current half a million outlets where they are available.
Sharma shared ambitious revenue targets, citing a goal of reaching a turnover of ₹4,000 crore this year and aiming to double it in four years, a target he considers feasible given the company’s resources and capabilities. He emphasized Perfetti’s adeptness at managing cost pressures, especially due to their wide array of products, including those sold at ₹1.
Looking ahead, he acknowledged the challenges posed by rising packaging costs but indicated a focus on capitalizing on consumption trends. “We want to ride this wave and maintain our pricing strategy in the near term,” he remarked, while also noting potential impacts on profitability due to external pressures, though he remained hopeful that easing geopolitical tensions may improve the situation.
When discussing the performance of key brands, Sharma highlighted the success of global brands like Chupa Chups, Mentos, and Alpenliebe, alongside homegrown brands like Center Fresh, Center Fruit, and Happydent. He remarked on the company’s ongoing challenges with capacity for Happydent, emphasizing the strong growth potential of Mentos and Chupa Chups, which the company is eager to leverage. “We have a strong set of brands doing exceptionally well,” he concluded, underscoring their commitment to innovation and growth.
