NIGERIA – 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 coupled with increased competition.
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.
According to the company, 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.
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 to review the pricing strategy based on feedback.
In addition, the company also revealed that it is considering reducing the pack sizes (from six units to four and from ten units to eight) to lower the price.
According to distributors, compared to similar products, Cadbury Bournvita Biscuit is priced at a premium, which distributors believe hampers its sales.
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.
“No matter how good a product is, if the price is high, it will not enjoy high patronage. 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. He believes this is due to the high price, resulting in decreased demand.
“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.
Cadbury’s decision on how to address these challenges remains unknown. However, 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.