- Cadbury Nigeria has temporarily halted the production and sale of its Cadbury Bournvita Biscuit due to complaints about its high price, which distributors believe is hindering sales.
- Distributors have called for a reduction in the product’s price to make it more competitive with other brands in the market.
- Cadbury Nigeria is considering reducing the pack sizes and reviewing the pricing strategy based on feedback received from distributors and sellers.
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.
It’s delicious though…and of high quality….almost like a cookie
I totally agree
We love it. My brother and his wife wanted to buy lots of cartons. Too bad
Distributors are always calling for low priced products to make high turnover and more profits, but also economic hardship seem to have pushed most consumers to look for cheap products in all segments, irrespective of quality. I believe this bournvita biscuit would be of higher quality than most competitors in the market, but competitive pricing is key for mass market adoption.
Exactly you are right, average Nigerians won’t look for quality which is very bad to me. I can’t imagine a distributor comparing Cadbury biscuits to Coaster biscuits. I think they still need to orientate some of them. The best Cadbury can do is to reduce the quantity and let the quality be the same to compete swiftly with competing brands. to maintain or increase their year-to-date revenue (YTD)
Another thought maybe Cadbury should have waited for 2 to 3 years to review the YTY change or %YTY before taking this decision .
One of the best biscuits I’ve had, hope they reconsider.
These distributors are only after their pockets. I bought a roll of the biscuits and I enjoyed it with my family. I went back to buy more, it was no longer available. How could they compare such biscuits with ordinary coaster? They are practically incomparable! They should continue to produce the biscuits, people love it.
Why on earth will distributors be comparing parle G or coaster biscuits with cardbury’s bournvita biscuits??
Cadbury is a household name that we ve known for ages and the quality of their products are topnotch.
There’s no basis for comparison at all!.
Distributors are just after their pockets. No matter how cheap a product is, it will be very expensive when u want to buy from them.
Talking from an experienced sales rep point of view.
We love it, we miss the brand and we don’t mind the price, the difference is negligible
Thanks for all your comments but I can tell you, you are not the ‘critical mass’ needed to push the volume business that will guarantee an economic share of the market. Selling through supermarkets and positioning the product as premium or superior to coaster etc is a good strategy but who are the main users?: pupils and students in the suburbs, Sales through Malams and hawkers. With the harsh economic conditions, Nigerians are looking for fit for purpose beand/products. Coca Cola is experiencing same, Ribena is almost off the market. Lacasera water suddenly becomes No 2 in the bottled water market? So the Managers of Cadbury perhaps should not have played in the low-margin high volume impulse biscuit market in the first place. My thoughts