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    Friday, July 14, 2023

    Cadbury Halts Production of Bournvita Biscuits Months after Launch

    Cadbury Nigeria Plc has suspended the production and sale of its recently introduced biscuit brand, Cadbury Bournvita Biscuit, in response to complaints about its high price.

    The biscuit brand, launched in November 2022, is available in two consumer pack units containing six and ten cookies, priced at N60 and N100 respectively.

    The suspension follows distributors’ calls for the company to reduce the price of the product as sales plummet.

    In addition to the price pressure from distributors, Cadbury is also facing competition from other brands in the biscuit market.

    Compared to similar products, Cadbury Bournvita Biscuit is priced at a premium, which distributors believe hampers its sales. 

    Research conducted by Nairametrics reveals that a carton of the biscuit, consisting of 48 units, is sold at a distribution price of N2,650. 

    This is significantly higher than competing brands like Coaster Biscuits (N1,600 per carton), Beloxxi (N2,100 per carton), and PaleG (N2,100 per carton).

    A reliable source at the organization confirmed the development to Nairametrics explaining Cadbury Nigeria made the decision to suspend biscuit production in order to review the pricing strategy based on feedback. 

    The source noted that distributors and sellers have complained about the high price, which has resulted in low demand. 

    The source also mentioned that Cadbury Nigeria is considering reducing the pack sizes (from six units to four and from ten units to eight) to lower the price.

    “For example, the six-unit pack could be reduced to four units, and the ten-unit pack could be reduced to eight units,” he said.

    Nairametrics attempted to contact Cadbury’s management for comment on the situation, but they had not responded at the time of publication.

    Further investigations conducted by Nairametrics across different markets in Lagos State revealed that the product was unavailable in most distributors’ and dealers’ stores. 

    Distributors of Cadbury Bournvita Biscuit expressed their opinions as well. 

    Mercy Adeleke, the owner of Mercylink Global Ventures, stated that the product is too expensive and should be priced at N2,000 per carton to compete with other brands. 

    She also criticized Cadbury Nigeria for bypassing distributors and using their own sales representatives for distribution.

    “The price is on the high price, no matter how good a product is, if the price is high, it will not enjoy high patronage. 

    The arrangement for making use of their sales representatives is not helping us as distributors. 

    They should reduce the price and make it available to distributors instead of using their sales representatives to get to the market,” she said.

    Chris Iloh, the owner of ChrisIyk Wholesale Store, mentioned that the product initially gained popularity upon its launch but has since disappeared from the market. 

    “Though the price was high, people rushed the products when they were introduced to the market, but they suddenly became scarce, I think there might be a shortage in production or something is wrong,” he said.

    He believes this is due to the high price, resulting in decreased demand. 

    Another distributor, Mrs. Bisola Ajaiye, echoed the sentiment that the price of Cadbury Biscuit is too high and suggested reducing it to achieve success in the market.

    “The price of Cadbury Biscuit is too high,” said Mrs. Bisola Ajaiye another distributor. “People are not willing to pay that much for biscuits, especially when there are other brands that are just as good but much cheaper.” 

    She said that the high price of the biscuit is making it difficult for it to compete with other brands. 

    “We can’t sell Cadbury biscuits at the same price as other brands, because we’ll lose money because the supply price is high. They need to reduce the price to make the product a success,” she said

    Cadbury’s decision on how to address these challenges remains unknown. However, it is evident that the company is facing difficulties in gaining market share in a competitive landscape with well-established brands.

    In Q1 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 profit after tax of N3.435 billion for the same period, representing a growth of 124% compared to the previous year. 

    This increase was primarily driven by a 30% rise in topline revenues, reaching N16.5 billion, fueled by improved sales in the refreshment beverages segment, including Bournvita and 3-in-1 Hot Chocolate. 

    The confectionery division, encompassing brands such as Tom Tom, Buttermint, Candy Caramel, Candy Coffee, and Clorets gum, also experienced increased sales.

    The company share price closed at N18.6 and is up 16.25% YtD.

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