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Disney enters Indian novelty chocos market

BS Reporter  |  Chennai/ Hyderabad 

It will be a sweet affair for those who are in deep love with their favourite cartoon characters of Disney. For, they can now take a deep bite into them as well!

Disney Consumer Products (DCP), the business unit of The Walt Disney Company that extends the Disney brand to merchandise, today raised the bar by creating a new cocoa-based chocolate category -- novelty (crafted in different shapes and designs) chocolates -- in India with the launch of its new range of products under the ‘Fun House’ brand in Andhra Pradesh.

DCP has roped in Hyderabad-based Kayempee Foods Private Limited, a manufacturer of slabs, chocolate filled cones and malted chocolate products, as its exclusive franchisee, which will be responsible for manufacturing and distribution of the products in India, Bangladesh and Sri Lanka.

“We are dabbling into the novelty chocolates category, which actually doesn’t exist in India, initially with 7 slab SKUs (stock-keeping units) with Disney toon characters embossed on them. With the long-haul relationship with Kayempee, we will be launching 16 new SKUs including cones and toy candies, besides making other Disney products like Mickey and Friends, Winnie the Pooh, Cars, Disney Princess, Hannah Montana and Toy Story, as chocolates during March-April 2012,” Rajat Diwakar, head (South Asia), Disney FMCG, told Business Standard.

Quoting a Euromonitor study, Diwakar said the cocoa-based pure chocolate market in India was pegged at $1 billion with the dominant leader being Cadbury. The average growth rate has been close to 20 per cent, he said, adding the company was planning to expand its chocolate business to other southern states by May and start pan-India operations from June, followed by entering Bangladesh and Sri Lanka in 2013.

“DCP also operates in multiple categories like fashion, toys, home decor and apparel. That itself will have a strong rub off effect on the sales of these chocolates,” he said. DCP contributes between $3 billion and $4 billion to the over $30-billion revenues of The Walt Disney Company. “In India, we (DCP) would be around Rs 1,000 crore in retail sales across different categories and segments,” Diwakar added.

Kayempee to invest Rs 20 cr
With the DCP tie-up in place and increase in business from other MNCs, Kayempee is in the process of enhancing its manufacturing capacity at its Hyderabad plant from the current 500 tonne per month to 1,200 tonne in the next two-three months. The company is investing Rs 20 crore through a mix of internal resources and debt in the new production, line which will go on stream from May 2012.

“In the first year of launch, we are expecting to garner revenues of Rs 20-25 crore from Fun House and Rs 100 crore in three years time,” Sirish Kothapally, executive director of Kayempee, said.

First Published: Thu, January 12 2012. 00:31 IST