Kraft market share down to half

Increasingly fiercer competition and the low purchasing power have started to yield the first victims among chocolate producers.
Kraft Foods Romania (KFRo), which was boasting 62% of the market about two years ago, has now come to account for only 30%, its representatives say, mentioning a survey by market research company ACNielsen.
KFRo officials explained the company’s position on the chocolate market was caused by the decline of the entire market, influenced in its turn by the low purchasing power of the consumers. This explanation can also be found in the annual report devised by the parent company Kraft Foods Inc.
“We feel the sales volumes on the sweets market in 2002 and 2003 were and still are influenced by the low purchasing power of the consumers, affected by the increase in utility prices, by taxes and duties,” the KFRo representatives said.
When publishing its 2002 results, Kraft Foods Inc. was mentioning the  “decline” in Romania, generated by the low purchasing power of the consumers.
A GfK Romania survey showed chocolate consumption in Romania went down 6.4% last year.
The chocolate tablet segment, which accounts for the bulk of the market, registered a 4% drop, to 5,217 tonnes.
Still, the decline was lower than in 2001, when it amounted to 18% compared with 2000. The GfK survey canvassed a sample of 2,000 households, which are representative for the entire country.
Heidi Romania’s marketing manager Massimo Palumbo says his company is yet unaffected by the downward trend of the market.
“We actually posted growth from 5.5% to 7.5% last year. It is not much, but it is growth nonetheless. However, I cannot tell you that if we grew, the market did, as well, or if others decreased, the market decreased, too.”
Palumbo added that the changes on the chocolate market were caused by the emergence of more and more contenders.
“Primola was not around two years ago, and Kandia was practically reborn last year,” Palumbo added.
The same GfK survey places KFRo first on the chocolate tablet market with 54% market share, followed by Excelent (25%), Heidi Chocolate Swisse and Primola Prodimex (5% each), with Kandia Timisoara ranking close behind.
KFRo last year brought some of its international brands in Romania, such as Milka and Toblerone. At the same time, it expanded its portfolio with the Africana cream-filled tablets and introduced the 30g Poiana Cioco and Poiana Rom bars to meet the “consumers’ demand for better offers in terms of price.” Kraft’s portfolio also includes the Smash, Suchardine, Silvana, Sugus and Yam-Yam sweets.
The competition in 2002 was extremely fierce in terms of investments in promotion campaigns, as well. These campaigns, along with the product launches and repositioning did not eventually lead to an increase in sales but to the migration of the consumers from one product to another, specialists say.