Alex Sweets Satisfying India’s Sweet Tooth With Russian Confectioneries

In 2022, the Indian confectionery market was worth INR 338.2 billion. By 2028, the IMARC Group projects, the market will have grown to a value of INR 485.9 billion, a compound annual growth rate (CAGR) of 6.3%.

Candies, chocolates, chewing gum, and other sugary foods are all included in the broad category of confectionery. They are widely consumed as treats or snacks throughout the world. Products in the confectionery industry range from the hands of independent candy makers to those of multinational conglomerates. They can be bought in most grocery stores, corner shops, department stores, and even online.

Increasing consumer preference for sugary snacks and treats as a form of indulgence and comfort food is the primary factor propelling the market in India. Consistent with this trend, the gifting of confectionary items for holidays and other special occasions is becoming increasingly common. In addition, conventional and unusual flavors alike are contributing to the market's growth thanks to the abundance of options available to consumers. Sales are being boosted throughout the country by the growing confectionery industry and the fact that sweets may be a very inexpensive and easily accessible luxury item. In addition, the proliferation of eCommerce and online stores offering confectionery products is driving growth.

In addition, the introduction of numerous novel confectionery goods is anticipated to contribute to the expansion of the market. High-profit margins in the confectionery business are expected to encourage product innovation and the development of new product lines, which in turn is expected to fuel market growth. In addition to rising consumer disposable incomes, innovations such as sugar-free and reduced-sugar confectionery products, the availability of kosher and halal-certified confectionery products, the development of premium and high-end confectionery products, and the widespread availability of seasonal and limited-edition confectionery products are also contributing to the market's expansion.

To explore this ever-growing market and give Indians a real taste of the Russian confectionary world, Alex Sweets is all geared up to enter the country with its wide range of products. The company claims that it is one of the leading exporters of confectionery in the South of Russia. With a focus on producing sweets from natural ingredients such as cereals, nuts, seeds, fruits, and berries, its top range brands are multigrain candies RendiTM, glazed peanuts AlexMikaTM, and a number of fruit bars. To give a broader view of the company’s expansion plans to India, Mikhail Rakhim, Head of Sales, Alex Sweets had an exclusive interaction with StartupTalky.

How do you envisage your future business operations in India?

Mr. Mikhail: The Alex Group Ltd. confectionery factory is among the largest in southern Russia. The majority of our revenue also comes from overseas. More than 20 nations receive regular shipments of our wares. Our confections have long enjoyed widespread acclaim in the CIS republics. We also exported to Southeast Asian countries like China, South Korea, and Vietnam, as well as to the Middle Eastern markets of Iran and Iraq. We see great potential for mutually beneficial cooperation and increasing confectionery markets as Russia has just this year entered the top three of India's trade partners.

What made you turn to India to expand your business nexus?

Mr. Mikhail: The multipolar nature of the world and the contemporary political agenda have no bearing on us. We've been increasing production every year. And maintain an optimistic outlook on expanding business ties with the East. The commercial potential in India's market is enormous. It is one of the world's fastest-growing economies and represents a sizable sales market that Russian vendors have yet to fully tap. After penetrating the nearby markets of Iran, Afghanistan, and China, we thought it would be a good idea to broaden our distribution to include India. We think it's likely due to rising demand for imported items, as well as an expanding middle class with more disposable income. Therefore, we want to gradually penetrate its market, initially focusing on large cities, shops, and supermarkets in India. We also have the support of our primary exclusive distributors.

Being able to capture the Russian palate, do you think the same response you will receive in India too?

Mr. Mikhail: The people of the Middle East and Central Asia share a lot of similarities with Westerners in terms of their taste preferences, and both regions have long-standing customs of enjoying hot beverages like tea or coffee with sweets. We believe there would be a market for our products in India due to the country's long history of enjoying flour confectionary items.

Please elaborate on your business plan in India and how you are looking to scale up the operations after setting the tone.

Mr. Mikhail: Our goals are lofty and determined. Our long-term goal is to have a strong wholesale and retail presence in the five major cities of India (Mumbai, Delhi, Bangalore, Chennai, and Hyderabad). Naturally, we wish for AlexSweets and our flagship brand Rendi to become household names in India.

Since you are dealing with confectionary products that normally have less shelf life, how you are going to manage your inventory in India while maintaining high product quality?

Mr. Mikhail: We keep the health of our customers in mind at all times during the confectionary production process. That's why we take care to source only the finest materials for our goods.  Maintaining the efficacy of the products we utilize is crucial to the success of our business. That's why all of our goods have a one-year shelf life. We're attempting to get on board with the current trend towards healthier lifestyles. We are confident that our items will be successfully and opportunely implemented thanks to our well-established competent plan, solid logistics, and effective marketing.

What are the major challenges that you need to overcome before venturing into this vast and diverse market?

Mr. Mikhail: Of course, expanding into new markets presents its own set of difficulties. To obtain our items on store shelves, we must first go through the registration and certification process. The high prices in India are a problem because of the high import taxes. And we need to do the proper maths so that the final pricing is reasonable, competitive, and within the people's price range. Logistics and banking provide a significant obstacle as well. Because of the difficulties, constraints, and sanctions that the global economy has imposed on our country recently, we are also looking into how to conduct business with Indian rupees. We are also keeping an eye on the progress of an Indian equivalent to SWIFT. Fixing the issue of inconsistent brand recognition is also crucial. To win the favor of Indian consumers, we must develop the best plan of action for marketing to them.

What are your bestsellers, and do you think that these will remain bestsellers in India as well?

Mr. Mikhail: "RENDI" TM multigrain candy is our most popular product. We anticipate its success in India as well. Wheat and grain-based candies are extremely popular. After traveling over India, we came to this conclusion. The combination of our multigrain flakes (oats, wheat, corn) and premium confectionery icing has the potential to be a delicious and nutritious replacement for other types of desserts. Natural fruit bars "PastiLove" TM, "PastiLife" TM, and "Pasti-Slasti" TM are also big sellers for us. This delicious and healthy energy, vitamin, and trace element supply does wonders for the immune system and the mood.

Are you planning to tweak some of your products as per the Indian taste or do you want to market them in their original form?

Mr. Mikhail: Very positive feedback was received from Indian consumers who participated in the "Made in Russia" International Business Mission's sampling and degustation events.  The candy we made was well received by consumers. That's why we're working to perfect the flavor of our products. We anticipate its success in India because Russia is already recognized internationally as a leading provider of both agricultural exports and organic pure products. Our company's mission is to share the authentic flavor of Russian pastries made with only the finest all-natural ingredients with the local community.

Logistics is going to be a major concern how are you planning to tackle this issue?

Mr. Mikhail: We have a major problem on our hands right now, and it has to do with logistics. The lack of a shared border with India is by far the biggest drawback. Therefore, the logistics are time-consuming and expensive in contrast to, say, Russian-Chinese trade. New International North-South Transport Corridor through Iran and more conventional cargoes via the Novorossiysk port on the Black Sea are both being investigated, however. This will facilitate more efficient and profitable business between our countries and save time and money in the process.

Are you planning to partner with some Indian company to simplify your business operations?

Mr. Mikhail: We understand that India is a very big country and its regions differ greatly from each other in cultural and business ways. That’s why we are interested in cooperation with several distributors. Yes, we need a strong reliable partner with importing and exporting experience in India who knows the local market features and who will provide us with the first steps in India. We are searching for a successful experienced confectionery importer who has access to wholesale and retail distribution channels in India.

Marketing Strategies of Snickers: The Go-To Snack

Snickers has achieved remarkable milestones through its innovative marketing strategies. By leveraging bold and engaging campaigns, it has solidified its position as a household name.

StartupTalkyArchana Karthikeyan