Saturday, October 22, 2016
The Myanmar Times
The Myanmar Times

Multinationals aim for sweet success in Myanmar

A shop stocked with candy in downtown Yangon January 11, 2013. (Boothee/ The Myanmar Times)A shop stocked with candy in downtown Yangon January 11, 2013. (Boothee/ The Myanmar Times)

Mr Parodi said Myanmar’s lack of trade infrastructure is an obstacle to the distribution of a larger product range, but also said that a measured approach would best fit the company’s strategy.

“Of course we plan to grow further also by enlarging the product portfolio but I believe at the moment we need to work on a basic stage first with a limited assortment, with clear focus,” Mr Parodi said.

One major transportation hurdle that Perfetti Van Melle has managed to avoid is the need for refrigerated shipping. The company’s confectionary sugar and gum based products are less susceptible to Myanmar’s tropical heat.

“Myanmar is a very potential market for confectionery products like ours, which do not require a cold chain in distribution and have affordable prices,” Mr Parodi said.

Food giant Nestlé, the maker of KitKat, Butterfinger and Smarties – along with a host of other candy products – upgraded its representative office in Myanmar last year in anticipation for an uptick in business.

According to a company spokesperson, Nestlé works with a number of local distributors who import products directly from other countries, mainly within the ASEAN region.

The company scaled back advertising and marketing in Myanmar during the period of economic sanctions but never fully left, maintaining a small office in Yangon.

Nestlé has kept a low-profile regarding its future plans for Myanmar, choosing not to comment on possible expansion.

But the company’s 2011 annual report shows Nestlé saw 13pc organic growth in emerging markets, where 40pc of the company’s sales were recorded. The growth was driven in part by super consumers India and China’s seemingly insatiable appetite for chocolate.

For both Nestlé and Perfetti Van Melle, growth in developing countries such as Myanmar is promising.

According to data published by market research group Euromonitor International on December 10: “Retail growth for confectionery in emerging markets is expected to be three times faster than that of developed regions from 2012 to 2017.

“[…]In absolute value terms, some 77pc of global growth will stem from developing markets.”