International chocolate company Cadbury Schweppes (LSE:CBRY.L) today launched operations in Israel, after a two-year market study. Cadbury has budgeted $4.5 million to win 25% of Israel’s NIS 1 billion chocolate market by 2005. As reported by “Globes”, Cadbury will collaborate with Israeli confectionary company Carmit.
Cadbury, the world’s third largest chocolate company, is accelerating its merger and acquisition business strategy, recently acquiring Turkey’s second-largest confectionary company, Kent.
Cadbury’s major competitor in Israel is Elite, which dominates the country’s chocolate market. Elite has already defeated Nestle (SWX:NESN), which tried to enter the Israeli market in 1997 with a limited range of products.
Carmit has adopted the name Cadbury Israel. Carmit CEO Rael Goodman said Elite reaction to Cadbury entry to Israel, i.e. a NIS 10 million investment in product development, underscored the importance of Cadbury’s entry in developing the Israeli market, which would otherwise stagnate. Goodman said there was great potential in the Israeli chocolate market while chocolate per capita consumption overseas averaged 10 kg a year, in Israel it was only 2 kg.
UK-based Cadbury Schweppes has an annual turnover of $8 billion. It operates in 200 markets and has 80 manufacturing locations in 50 countries.
Cadbury Schweppes also announced today that it plans to acquire US chewing gum maker Adams from Pfizer for $4.2 billion. The deal would make Cabdury the world’s second largest chewing gum manufacturer.
Elite currently controls 70% of Israel’s chocolate market with five brands. Vered Hagalil has 14%, Ferrero 4%, Nestle 3%, and other companies 9%. Carmit hopes to win 12% of the market after its first year of operations, and increase the size of Israel’s chocolate market by 10%.
Published by Globes [online] - www.globes.co.il - on December 17, 2002