Raahil Chopra
Aug 18, 2023

Brand purpose doesn’t need to be heavy duty: Rajesh Ramakrishnan

Perfetti Van Melle's managing director chats with Campaign India about the company's growth, category challenges, the lack of humour in advertising, agency partnerships and more...

Brand purpose doesn’t need to be heavy duty: Rajesh Ramakrishnan
At a time when brands are engaging with agencies for more 'project' work, Perfetti Van Melle has been working with McCann, Ogilvy, and Wavemaker for years and according to Rajesh Ramakrishnan, managing director, Perfetti Van Melle and board member, MMA.
 
We caught up with Ramakrishnan to learn more about his view on specialist agencies, his stint at Perfetti Van Melle (which is now close to a decade long), sustainability and more...
 
Edited excerpts:
 
You have spent close to a decade now with Perfetti Van Melle. How has the company and the market evolved over this period?
 
I’ve spent nine years, of which three and a half years were in Bangladesh.
 
If I look at the market in India, the confectionary market has been growing at a steady pace which is in the low, single digits.
 
The category is extremely fragmented and has many regional players. I don’t think anyone has a count on the exact number of brands in this category. This is because it’s a category with a very low entry barrier and there are loads of local players who only sell products in a few districts around their area of operations. As a consequence, it’s a highly fragmented and competitive category.
 
Over the last 10 years, the category has started moving up in price points. Earlier, the price point was 50 paise to a rupee. Now, the 50 paise price point has almost completely gone and the rupee is gaining salience. There are some products which are even sold at INR 2, 5 and 10.
 
With regards to Perfetti over the last few years, we had a bit of a bumpy ride between 2013 and 2018. This was on the back of various factors like demonetisation, regime change and all of that.
 
The last four to five years have been good for us. If I leave the Covid lockdown period aside, there has been handsome growth for the company. We are the market leaders with a 25% plus market share, so it’s our responsibility to drive the category.
 
Asia and Oceania contribute the most to your sales with a total of 39% of your sales coming from the region. Where does India fit in?
 
I don’t have the exact split. The top markets for us are the USA, Italy, China and India in no particular order. Asia by its size is a pretty important market for us.
 
Could you tell us a bit about your portfolio? Which is the highest-selling brand in India?
 
We operate in gums, candies, jellies, lollipops, mints and so on. We have three brands in the gum category – which are Center Fruit, Center Fresh and Happydent. Center Fruit is our highest-selling product followed by Center Fresh.
 
In the jellies category, we have Chupa Chups and Alpenliebe Juzt Jelly. In Lollipops again we have Chupa Chups and Alpenliebe.
 
In mints, we have Center Fresh.
 
Mentos is another big brand for us.
 
How does this compare to sales of products in different markets?
 
In India, we have a mix of regional and global brands. The global brands in our portfolio are Mentos, Chupa Chups and Alpenliebe.
 
Brands like Center Fresh, Center Fruit and Happydent are regional brands. We find these products in Bangladesh, Sri Lanka, the Middle East and Nigeria.
 
Our biggest global brand is Mentos.
 
Sustainability is a buzzword. What is Perfetti Van Melle doing in this area?
 
Sustainability is a key area of focus in today’s context and we look at it in different ways.
 
Firstly, we are looking at how we are continuously increasing our usage of green energy. A lot of fuel consumption is converted into biomass fuel. That’s an ongoing journey and we’ll keep at it.
 
Secondly, we are looking to continuously reduce the quantity of water used for production.
 
Thirdly, we do need to use plastic to deliver our product to the consumer, since it’s the only way we can maintain the purity of the product. But we have various initiatives to recycle it. We use recycled plastic for all our Diwali gifting so at least a percentage of it gets reused.
 
Of the jars that we use to sell, almost 50% of them are made from 20% recycled PET. So the jar isn’t 100% plastic.
 
Various initiatives are afoot but it’s a journey and we are on our way when it comes to sustainability.
 
Any changes to the packaging?
 
We are still experimenting. The global Mentos jar is the first launch for us in a paper container.
 
In global markets, the weather conditions are favourable for us to use these containers.
 
In India, we would like to move in this direction too but we need to test this. If consumers trust us, we have to offer them a product which is of a certain quality. That journey will take some time. We have different targets for different aspects of sustainability.
 
At a recent MMA event, you spoke about the parallels between photography and business transformation. How are the two linked?
 
It was an interesting event and the theme of it was ‘transform to thrive’. The context there was that today business transformation is a bit of an imperative. The question is, it’s not about going through a transformation and surviving, but how can you thrive?
 
I’m passionate about photography and have been doing it for the past 20-odd years. There are quite a few parallels between the two.
 
One of the key parameters in photography is composition. Composition is what you keep in the picture, and what you don’t keep in it. For example, if you’re taking a picture of your family you may not want a lamp post to be jutting out of a family member’s head. Similarly, strategy is all about what you intend to do and what choices you make about what not to do. So when you’re looking at business transformation, it’s very important to be focussed on what aspect of the business you’re looking to transform.
 
The other parallel is that in photography a lot of the things are about the connection one has with the subject. When you go through a business transformation, it’s very important to have a connection with people because any change is typically looked at as bad. For example, when we went through a business transformation, one of the first things we said to the team was that this transformation is to help us grow. We also told them that along with us we want you to grow and clearly articulated the role of each person in the transformation journey. The third bit to close the loop is that as and when we see small wins, we talk to the employees about it. We could tell them that we’ve set 27 targets, and now we’ve completed one in three months and now let’s work towards target two.
 
In photography, before you take a shot, you look at multiple perspectives to get the right angle to take a picture. In transformation, we need to look at the right kind of benchmarking. For example, if I’m looking at the cost to serve, I must benchmark it from different organisations to see the other things that exist in the market and what best practices can be implemented in our organisation. Taking views from people in other roles too helps.
 
Agency partners – who do you work with right now across your portfolio of products?
 
From a creative perspective, we have our brands almost equally divided between McCann and Ogilvy. They’ve been with us for more than 25 years. Both agencies do a great job on the brands.
For media, we work with Wavemaker.
 
When it comes to digital, Ogilvy and Wavemaker handle bits of it. Sometimes, when we need to create some work for the medium, we work with smaller agencies too.
 
What’s your view on specialist agencies? Would you rather work with a consolidated agency that handles all your work?
 
One of the important things, I would say and the advantage that we have with working with the likes of Ogilvy, McCann and Wavemaker is that they know our brands in and out for the last 20 years. It’s very important to be true to the core of the brand in whatever we put out and to that extent, leaning on these agencies makes a lot of sense.
 
Then, sometimes for occasions such as Halloween, we need tactful communication, we are open to looking at it.
 
What’s your and Perfetti’s view on AI/metaverse? From my understanding, we saw an increase in the number of campaigns early last year and since then we’ve seen this reduce. Is it because brands tried this and saw little or no success?
 
I think it’s still early days for the Metaverse. Ultimately, brands need to provide consumers with meaningful experiences.
 
Now, there are many ways in which we can do this.
 
Meta, VR, and AR offer us an opportunity to do this in an elevated way.
 
Last year, Alpenliebe partnered with a kid’s TV channel, where we gave out awards on the Metaverse. Children came onto the platform, played games and interacted with each other on the Metaverse. That’s one experience we couldn’t give out in the real world.
 
It’s important to see a good fit between what a brand stands for and what the consumer is looking for. Then we need to look at the power of the platform. This needs to happen very well for it to be successful.
 
We are seeing brands dabbling on the platform and slowly we’ll start seeing good campaigns coming out for the medium.
 
Do you think it was a case of brands getting onto the Metaverse before consumers?
 
Yes, I think that’s true. Further, not everybody has access to that sort of technology. One needs those headsets and other technology to support that and I think it’ll take time.
 
We’re looking at more brands looking to be ‘meaningful’. In an attempt to connect with their consumers, we are seeing a lot more long-format content, a lot of which is serious in nature. While your brands have used humour to connect with the consumer in the past, do you think the industry has lost the humour?
 
I was having a chat with Prasoon Joshi last week and we were discussing exactly this point.
 
The Happydent ‘palace’ commercial won at Cannes Lions (in 2007) and was one of the best-ever commercials. It was created around 20 years ago. We used shining white teeth as a way of lighting up stuff.
 

A couple of years ago, we wanted to take Happydent into a purpose-led space. We took the idea of ‘shining light’ in a matter which wasn’t heavy and serious. We threw light on social issues like garbage management, scribbling on ancient monuments, or sitting on a lady’s seat in public transport. It took the essence of the brand, the product and created purposeful communication in a light, easy manner. So purpose doesn’t necessarily have to be heavy duty. Ultimately, you’re a chewing gum brand and you can’t take yourself so seriously that you can preach to the world and change it.

Your LinkedIn profile states that ‘great leaders can inspire their team to have confidence in themselves’. How can one go about this?
 
One of the things I picked up from a training workshop in 2002, was the line: ‘Good leaders are those who inspire confidence in the team. Great leaders are those who inspire the confidence of the team in themselves'.
 
So, the whole point is if I’m a great leader my team should be able to function without me and in a way I become redundant to the job.
 
What that requires and what I try actively to follow is how I can effectively delegate. I believe for us to grow in our careers, we have to operate at one level higher. That can only happen if people can do what they’re expected to do and operate one level higher so that I in turn can work one level higher rather than me doing their jobs.
 
You spoke about how the industry is extremely fragmented and no one knows how many players exist. Other than that what would be the challenges you face?
 
The fact that we operate on fixed price points. Center Fresh was launched 30 years ago and has been priced at INR 1 since then. If you look at sugar prices from then to now, they have gone through the roof.
 
If one is asked about how much toothpaste costs, chances are that one would have no idea. Even if one increases the price from INR 32 to 34, one will never find it out because it’s bought alongside other items.
 
However, I can’t make the price of Center Fresh from INR 1 to 1.2. The big challenge in this category is how I continuously value engineers so that I can keep to these price points and yet deliver value to the consumer. This is why we continuously look at exploring higher price points like INR 5 and 10. The fact that we work at fixed price points, which is also true for salty snacks and other categories, that’s one of the bigger challenges.
 
Before digital payment came in, there were a lot of times shopkeepers gave out products priced at INR 1, which could have been from your portfolio as change back to the consumer. With this reduction now, has it impacted sales or was that number too small in any case?
 
It hasn’t impacted us. A lot of children who buy our products buy it as a portfolio. They go to a shop with INR 5 and buy candy, bubble gum, etc. For them, that change wasn’t the issue at all.
 
For smokers, we saw them looking at utilising the change for mint. But it hasn’t made that much of a difference for us.
 
Source:
Campaign India

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