Developing a roadmap to increase presence of SPLENDA in Horeca Channel

Abstract

Splenda is a sucralose based low calorie sweetener available in 7 SKUs : Granulated (55g,110g), Sachets (50g,100g), Sweetminis (100, 300, 500). It is not necessarily positioned as an option for diabetic patients, but rather as for ‘an overall healthy lifestyle’. Sugarfree (>80% market share) and Equal are the competitors to Splenda in the Indian market. Splenda is being launched in India through J&J’s import channel with an emphasis on the HoReCa channel. HoReCa Channel: The HoReCa (Hotel, Retail, Catering) channel forms a part of the alternate channels of distribution. HoReCa channel is particularly suitable for products such as Splenda since it provides a medium through which a wide consumer base can be accessed and it provides a point of first sampling for most of these consumers. Further, the brand and quality associated with the HoReCa institutions is also associated with brand Splenda’s quality. How does import channel work? Generally, third party importers buy goods from international wholesalers to cater to the demand from local customers. The price at which these goods are purchased include the internationally based company’s profit margin and the wholesaler’s margin. In the import channel system, the Indian counterpart of the company purchases the goods directly from the internationally based company at a low transfer price. After including profit margins, these are sold to the importer. Distribution to wholesalers, distributors and retailers is done by the importer. J&J follows a High Sea Sales (HSS) model where the ownership is transferred to the importer before the goods reach the Indian destination (during transit). This implies that the custom duty is to be paid by the buyer, i.e., the importer.