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HomeBusiness NewsCadbury Nigeria Suspends Production of Cadbury Bournvita Biscuit Due to Pricing Concerns

Cadbury Nigeria Suspends Production of Cadbury Bournvita Biscuit Due to Pricing Concerns

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Lagos, Nigeria – Cadbury Nigeria Plc, the renowned confectionery and beverage company, has recently announced the suspension of its newly introduced biscuit brand, Cadbury Bournvita Biscuit, in response to mounting complaints regarding its high price. Launched in November 2022, the product’s premium pricing and fierce competition in the biscuit market have contributed to dwindling sales figures.

Distributors have been pressuring the company to reduce the product’s price, prompting Cadbury Nigeria to review its pricing strategy. The biscuit brand, available in packs of six and ten cookies priced at N60 and N100, respectively, faced challenges from rival brands in terms of affordability. Markey survey revealed that a carton of Cadbury Bournvita Biscuit, containing 48 units, was sold at a distribution price of N2,650. This cost significantly exceeded competing brands such as Coaster Biscuits which went for N1,600 per carton, Beloxxi which went N2,100 per carton and pure bliss biscuit which went for N2400 per for 24unit carton.

According to sources within the organization which confirmed the decision to suspend the biscuit production, explained that Cadbury Nigeria acknowledged the need to reevaluate its pricing strategy based on feedback that was collected from distributors. It was revealed that distributors and sellers had voiced concerns about the high price, which resulted in reduced demand. To address this issue, Cadbury Nigeria is reportedly considering reducing the pack sizes from six units to four and from ten units to eight, ultimately lowering the price point for consumers.

Distributors have also expressed their concerns regarding the high price of Cadbury Bournvita Biscuit and offered their insights. One distributor suggested that the product should be priced at N2,000 per carton to effectively compete with other brands. They also criticized Cadbury Nigeria for using their own sales representatives instead of working through distributors, emphasizing that a high price can hinder the product’s popularity and demand.

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Another distributor noted that although the Cadbury Bournvita Biscuit initially gained popularity upon its launch, it has since disappeared from the market. Speculating on the reasons behind this, they mentioned a possible shortage in production or some underlying issue possibly caused by the high price, resulting in decreased demand.

Similarly, another distributor echoed the sentiment that the price of Cadbury Biscuit is too high. They emphasized the importance of reducing the price to make the product more competitive and profitable for distributors. Consumers, according to this distributor, are unwilling to pay a premium for biscuits when there are other equally good but more affordable brands available.

The specific actions Cadbury Nigeria will take to address these challenges remain undisclosed. However, it is evident that the company faces difficulties in gaining market share within a competitive landscape that is dominated by well-established brands.

In the first quarter of 2023, revenue from the recently launched Bournvita biscuit segment reached N604 million, accounting for 3.65% of Cadbury Nigeria’s total revenue of N16.56 billion. The company reported a remarkable profit after tax of N3.435 billion for the same period, representing a significant growth of 124% compared to the previous year. This notable increase was primarily driven by a 30% rise in topline revenues, reaching N16.5 billion, which was fueled by improved sales in the refreshment beverages segment, including Bournvita and 3-in-1 Hot Chocolate. Additionally, the confectionery division, encompassing popular brands such as Tom Tom, Buttermint, Candy Caramel, Candy Coffee, and Clorets gum, also experienced increased sales.

At the close of trading, Cadbury Nigeria’s share price stood at N18.6, reflecting a 16.25% year-to-date increase.

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The future course of action for Cadbury Nigeria regarding the Cadbury Bournvita Biscuit and its pricing concerns remains uncertain, leaving industry observers curious about the company’s next steps in regaining market traction.

 

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