Perfetti planning

The third biggest confectionery group worldwide is engineering cutting edge initiatives to accelerate category value.

In its unwavering bid to generate increased shopper demand and secure closer contact with its distribution network, Perfetti Van Melle took a major step early last year with the opening of its Dubai-based competency centre.

Focused on sales, marketing, NPD, trade marketing, consumer insight development and administration, the move triggered massive ramifications in an impulse category where knowledge of markets and consumer desires is a must, according to Patrick Dorais, regional marketing and sales director, Middle East and North Africa, Perfetti Van Melle.

"We opened the office in Dubai at the beginning of 2007, but before that we were based in Switzerland. Before moving here, I was travelling out here every three or four weeks and only seeing what you see when you travel."

From its Dubai office, Perfetti Van Melle operates its Van Melle export division which manages a 9000km geographical spread covering Morocco, Algeria, Tunisia, Libya, Egypt, Sudan and Senegal in Africa, Lebanon, Syria and Jordan, across the GCC, Yemen, Iraq and Iran.

"This office will be supporting all of that business and we work with their appointed distributors in all of those markets, as well as key account managers, salespeople, merchandisers, delivery drivers and logistics people," Dorais says.

"We want to be closer to the pulse of the market, as we have excellent distributors but they need our support. They're our extended arm to the trade."

Having a presence in the UAE has enabled the division to fine-tine its sales and marketing function while working with distributors, as "for each market, we might have multiple or exclusive distributors."

According to Dorais, its strongest markets are currently "the UAE, Saudi Arabia, Lebanon, Kuwait and to some extent Egypt," with the latter boasting a 75 million strong population from the 300 million people living in the company's MENA markets.

However, "some of our strongest markets are small markets, with the UAE having 4.5 million people and Lebanon at four million.

"Qatar has just 900,000 people while Bahrain has 750,000 people, yet these are interesting markets and you want to be there."

The company has been forced to tackle an extremely complex regulatory environment in terms of labelling, recipes and legislation in the Middle East and North Africa region, he says.

The biggest challenges derive from the fact that the company deals with very different markets, which can in turn lead to facing with different shelf life restrictions.

"In Qatar and Saudi Arabia, the shelf life for chewy candy, such as Mentos, was 12 months, while you could sell the same product in the UAE with a two-year shelf life."

Another big challenge is import duties, ranging from 5-100%, depending on the composition of the product, whether sugar free or not, and regulations on artificial and natural colours, he says.

To generate demand for its candies and chewing gums, the MENA team gains shopper insights to develop events and attractive promotions that promote sales and capitalise on efforts for special occasions such as the Holy Month of Ramadan.

"We strive to understand the retailer and provide our distributors with 360˚ solutions to maximise footfall, penetration and conversion," he explains.

"Firstly, in terms of launch excellence we develop properly targeted products, optimise pricing according to market opportunity and achieve listing and distribution."

He credits the company's impressive track record to its strengths: the quality of the products, ingredients and packaging.

According to Dorais, the company has optimised the in-store presence of its brands - including Mentos, Fruittella, Chupa Chups, Alpenliebe, Big Babol and Smint - by developing range and display solutions for different store sizes and channels.

"We drive secondary locations in-store, ensure maximum brand building opportunity and maximum visibility and create interactive displays with appropriate load-factor and easy stocking," he says.

There is scope in-store for brands to move beyond the designated confectionery areas, he argues, a strategy the company has reaped dividends from.

"We have great Chupa Chups products, so if there is a toy or clothing section for kids then we will position them there, while if a shop has a cigarette corner then why doesn't it offer breath fresheners like Smint or Mentos to complement that? We are developing the category and it's a constant work in progress," he comments.

Dorais says that although Perfetti is "not a household name, people are familiar with the brands and products behind it," as its global sales figures for 2007 have illustrated.

"The company turnover for last year was equivalent to basically every living person having two of our candies last year," he reveals.

In his observations on the ratio of modern trade to traditional trade in the MENA region, Dorais says "Kuwait is probably the most advanced as it has the Sultan Centres and the co-ops, whereas Iran has no modern trade as we know it."

Although Saudi Arabia is a huge market, "away from Dammam, Riyadh and Jeddah you start getting into valleys that you have to deliver to and there is a dependence on the wholesale," he explains.

"In Lebanon, they are very European-oriented people. They see different advertisements on TV and have different requirements, different expressions trigger the people."

READERS' COMMENTS

MORE FROM ARABIANBUSINESS.COM