Perfetti Van Melle India plans to reach ₹8,000 crore in revenue within four years by shifting its focus from low-cost candies to higher-priced products. The company aims to move consumers toward ₹5 and ₹10 price points to drive value growth. This strategy reflects a wider shift in the Indian consumer goods sector, where companies are trying to balance volume sales with the need to protect profit margins against rising costs.
Perfetti Van Melle India is planning a major change in its business strategy as it aims to double its revenue to ₹8,000 crore in the next four years. The company, which is a significant player in the confectionery market, has historically relied on its popular ₹1 candy segment. However, the firm is now looking to pivot toward higher-value products priced at ₹5 and ₹10. This move is part of an effort to focus on value-driven expansion rather than just selling more units of low-cost items.
This shift is notable because it addresses a common challenge faced by the broader Indian fast-moving consumer goods (FMCG) sector. For years, companies have focused on high volumes to drive growth. However, inflation and rising operational costs are pushing many FMCG firms, including those listed on the stock exchanges, to focus on 'premiumization'—or selling higher-value products to maintain profit margins. By encouraging consumers to upgrade their purchases, companies can often improve their earnings without needing to sell significantly more units, which is especially helpful when raw material prices remain volatile.
Perfetti Van Melle is also adjusting how it reaches customers. Currently, digital channels like e-commerce and quick-commerce platforms account for only 2.5% to 3% of the company’s revenue. Selling individual, low-priced candy packets is not efficient for these delivery apps, which often have high delivery costs. To fix this, the company is creating larger, customized packs that are more suitable for home consumption and sharing. Increasing the share of these digital channels is a major priority for the management, as it complements the firm’s massive physical network of 5.5 million outlets.
Despite the clear benefits of a premium-focused strategy, there are risks. The Indian confectionery market is highly price-sensitive. A large portion of demand still comes from rural and semi-urban areas where the ₹1 price point is deeply established. If the company moves too quickly toward higher prices, it risks losing its share of the market to local or unorganized competitors who might stick to lower price points. The management has stated that they plan to take a measured approach, likely introducing intermediate price points like ₹2 before fully shifting to the ₹5 and ₹10 categories, to avoid friction with price-conscious buyers.
For investors and market analysts monitoring the FMCG sector, the success of this transition will be a key performance indicator. It highlights how consumer habits are changing and how companies are adapting their product mix to survive. Future updates on how quickly the company can grow its digital revenue and whether it can maintain its market share while raising prices will be important to track.