The Quiet Math Behind Perfetti’s Candy Empire

Confectionery isn’t a glamorous category. It’s transactional, low-margin, and brutally competitive. But that’s exactly what makes it strategic.

For decades, brands like Perfetti Van Melle India (PVMI) scaled by owning general trade and selling at a rupee. The model worked—until it started bending under the weight of changing consumer expectations and channel fragmentation.

So what now? Premium formats are rising. Rural markets aren’t just about volume anymore. And digital commerce is quietly rewriting impulse.

Perfetti isn’t overhauling its playbook. It’s tuning it. Smarter packs, deeper rural plays, sharper innovations, moves that echo old lessons but speak to new conditions.

In conversation with BrandWagon Online, Gunjan Khetan, Marketing Director at Perfetti Van Melle India, talks about driving growth through smarter pack strategies, rural momentum, premium innovation, and staying shelf-relevant in a fiercely competitive category, among others. (Edited excerpts)

PVMI clocked Rs 3,080 cr in revenue in FY24, growing at a steady 12% CAGR. Was that growth driven more by product mix, pricing, volume, or market expansion?

Honestly, it wasn’t about chasing one shiny trend. Our growth came from getting the fundamentals right—then pushing harder where it really counts. A big chunk—about 30%—of our revenue now comes from products priced at Rs 5 and above. That shift says a lot. It’s not just about moving up the value chain—it’s about giving consumers more, and they choosing it.

Premiumisation wasn’t just a boardroom buzzword for us. It guided our innovation roadmap. But even the best products need to be seen to be sold. That’s why we doubled down on retail. Not just expanding our reach—we are in over 5 million stores now—but improving how we show up at each point of sale.

Where we have really felt momentum is in India’s smaller towns and rural markets. That’s been a game-changer. Whether it’s general trade, modern trade, or e-commerce, we have worked hard to stay visible and accessible—wherever the consumer is.

Sure, a good monsoon and stable rural sentiment helped. But what really set us apart was how quickly we responded to consumer needs—with products that made sense, and execution that actually moved the needle.

The category you are in has traditionally been volume-driven, but now there’s more competition from premiumisation trends—plus inflation to deal with. How are you balancing scale and profitability?

It’s definitely a tightrope. You need to understand what the consumer aspires to and what they can access. That’s where insight, speed, and innovation come in.

At PVMI, we have been walking this line through a dual strategy: building on our core value play while premiumising where it makes sense. Take Alpenliebe Eclairs Pop—it hits that sweet spot of indulgence and affordability. But we have also kept our Rs 1 and Rs 5 range rock-solid and relevant.

We have fine-tuned our approach to pack-price formats and channel strategy. For instance, micro-packs make premium formats more accessible, while channels like modern trade and e-comm are great for pushing higher-value SKUs.

At the end of the day, it’s about having a portfolio that evolves with the consumer—offering joy at every price point, without compromising long-term value.

With mass-market brands like Alpenliebe and Center Fresh, how do you manage margins differently across rural vs. urban markets, especially when it comes to pack sizes, pricing, and trade schemes?

It starts with understanding what each market needs—and then building around that.

In rural areas, stability matters. Our Rs 1 and Rs 5 offerings aren’t optional—they are central to our game plan. These packs are designed for scale, with cost structures that help us protect margins even when input prices move.

Urban markets, on the flip side, are all about experimentation and indulgence. That gives us room to try new formats—multi-packs, different sizes, new flavors—and capture higher value.

So it’s a bit of a dance: premiumise where we can, optimise where we must. Think of it as going deep in rural and wide in urban, all while staying nimble enough to meet changing expectations and realities on the ground.

You have launched things like gelatin-free Fruittella and Choco Éclairs. Are these driving volumes, or are they more about premiumising the portfolio?

For us, innovation isn’t just about fresh packaging or fancy names. It’s about unlocking new occasions, reaching under-served segments, and reimagining everyday indulgence.

Choco Éclairs Pop is a great example—it taps into a growing appetite for affordable treats that still feel rich and rewarding. That’s how we see innovation: not just as a way to add SKUs, but as a lever for meaningful, sustainable growth.

We want to elevate the category without alienating the consumer—and products like this do exactly that.

What’s your current channel mix like—how much comes from general trade vs. modern trade and digital? Has this changed meaningfully over the last few years?

General trade is still our backbone—no doubt about that. It drives a significant portion of our revenue and gives us unmatched scale but there has been a clear shift. Modern trade and digital are growing fast. Consumers are shopping differently, and retail digitisation is picking up speed. So we have adapted our strategy—not copied and pasted it across channels.

In general trade, it’s about last-mile reach and relevant pack sizes. In modern trade and e-commerce, we focus on curated assortments, impulse-led innovation, and bundling that aligns with newer consumption habits.

We are also investing in tech—analytics, demand forecasting, retail tech partnerships—to stay agile as the mix continues to evolve.

Confectionery is a classic impulse category. How are you driving repeat buys and frequency—through pack strategy, visibility, or bundling?

All of the above. The goal is simple: make it easy to buy, and even easier to buy again. On packs, we have built a flexible system—from single-serve to stick packs—so there’s something for every occasion, whether you are at home or out and about.

In modern trade and e-comm, bundling plays a big role. We curate combinations that not only nudge indulgence but also deliver perceived value.

Visibility is critical too. We have invested a lot in POS innovation—eye-catching displays at kirana stores, digital setups in supermarkets, and so on.

And then there’s the marketing layer. Campaigns like the Happydent “Palace” TVC or the recent “Kaisee Jeebh Laplapayee” from Centerfruit aren’t just ads—they build emotional memory. We have even used Gen AI to reach rural consumers with limited internet access.

The idea is to stay top-of-mind and within arm’s reach, always.

In a space where giants like Mondelez and Nestlé are playing close by, what’s PVMI’s competitive edge? Is it your distribution, manufacturing, branding, or something else?

It’s really the combination. We have built a moat with three key elements: depth, agility, and loved brands.

We reach half a million outlets directly. That gives us muscle. Our manufacturing footprint is agile, which means we can respond quickly to demand, pricing, or regional quirks.

But what really sets us apart are the brands. We have launched everything from tamarind-flavoured Juzt Jelly to choco-filled Alpenliebe lollipops—not because it sounds cool, but because it meets real consumer cravings.

And then there’s the storytelling. Brands like Center Fresh, Alpenliebe, and Happydent have become iconic not just because of distribution or pricing—but because of how we have consistently connected with consumers over time.

We don’t just sell at scale. We create salience. And that’s how we stay ahead.