Cadbury recovers from worm shock

Sales of Dairy Milk chocolate have turned the corner in May this year

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Cadbury India, the Indian arm of British confectionery giant Cadbury Schweppes, has seen a surge in its chocolate sales. This, after the melt-down in sales in the wake of the worm controversy last year.

Last October, when worms were found in bars of the flagship brand Cadbury Dairy Milk (CDM) in certain shops in Kerala and Maharashtra, the company saw its value share melt from 73 per cent in October 2003 to 69.4 per cent in January 2004. In May, however, it inched up to 71 per cent.

CDM sales volumes declined from 68 per cent in October to 64 per cent in January 2004. It edged up to 65.9 per cent in May 2004. Says a Cadbury India executive: "The big factor that has pushed up CDM sales is the Amitabh Bachchan campaign. It helped restore consumers' faith in the quality of the product."

CDM contributes about 30 per cent to Cadbury India's turnover, which stood at Rs 729.81 crore in the year ended December 2003. The Rs 2,000-crore chocolate market witnessed a growth of 4 per cent in 2003, according to AC Nielsen ORG Marg retail audit data.

Sanjay Purohit, executive director of Cadbury India, would not give the entire credit to the brand mascot. He claims that it was the astute action taken by the company which helped.

"We responded to consumers concern over the issue rapidly. Also, the communication campaign worked effectively in giving out the central message," he says.

For instance, the packaging was changed to include a sealed plastic wrapper inside the outside foil. Purohit says a new ad campaign, once again featuring Amitabh Bachchan, will have a joyful theme.

Clearly, the worm controversy had taken a toll on Cadbury's bottomline. For the year ended December 2003, its net profit fell 37 per cent to Rs 45.6 crore as compared with a 21 per cent increase in the previous year.