A top executive from the company gets talking on how they expect Coffy Bite to be a significant contributor to the company’s overall revenue – 25% in the next 3 years from the current 15%.

Venkatesh Parthasarathy, Marketing Head, Lotte India, tells us, “Coffy Bite as a product has always been around. It’s just that we had not invested in brand building exercises for many years. We have been wanting to relaunch the product for the last one and a half years, and right now seemed to be as good a time to reignite the argument of coffee versus toffee all over again.” Today, Lotte holds about 3 per cent of the market share, when seen in the context of confectioneries.

The biggest brand for the company is Lotte Choco Pie, which is nearing Rs 300 cr in revenue, which makes up for 57% of the total business. The next in line is Coffy Bite, which contributes about 15 pc to our overall business and in the next 3 years, we want to bring it to about 25 pc, Parthasarathy says. The confectionery segment (sugar boiled) makes up for 37% of Lotte’s business while 57% pc is occupied by Choco Pie and the balance 6 pc is taken up by gums, which are largely exported.

Giving us an idea of the challenges in the confectionery business, Parthasarathy says, “The larger challenge for us to sustain the Re 1 price point. Today in this business, the largest player has a 15 pc market share. There is a fair level of fragmentation in the market.” “Over the last 3-4, regional players, who were third party manufacturers for large companies like ITC and Parle, have now gone on to build their own businesses in this space. For instance, Prayagh Nutri Products in Hyderabad has its own product called Cintu, which offers multi-flavoured eclairs.” He goes on to add, “The next price points are Rs 2, 3 and 5. There’s only Cadbury Choclairs at the Rs 2 segment. The lollypop market which used to be Rs 2 or Rs 3 market has moved on to the Rs 5 bracket. But that again is a small market. The moment you move into the Rs 5 segment, you are competing with biscuits, chocolates and snacks, and there is a significant category overlap in this segment.” Tamil Nadu is more driven towards toffee and eclairs, apart from hard boiled candy, which explains the success of brands like Kopiko (an Indonesian brand). TN and Kerala are more evolved and urbanised markets, which have more of an affinity towards softer toffees and eclairs and they contribute about 20 pc to our business.