Kantar, Worldpanel Division
Kantar, Worldpanel Division
Taking the biscuit
Bringing festive occasions into daily life
There’s no way around it: Growth has become more challenging for biscuit brands.
Sales are quite stagnant for the in-home market, with growth at 3 percent, and we forecast this trend will continue to flatten in 2019 and beyond, as there is a limit to the number of new buyers the category can acquire. The sector is still managing, however, to grow the number of buyers, it still manages to bring incrementality of category buyers in out-of-home market.
The result is a more challenging landscape for biscuit brands to navigate. To expand now, they must understand and adapt to the changing needs of Indonesian consumers, who are on the lookout for great value for money as well as a great product. Manufacturers have to building a meaningful brand that can connect more deeply with consumer needs.
Many players in the biscuit category have recognized this flattening trend in at-home consumption and have been working to create excitement by using innovation as their leading growth lever.
In recent years, Kaldu Sari Nabati has been one of several local biscuit manufacturers aggressively launching new products: 24 new products in the past three years. Nabati Pink Lava and Nextar are two of the most prominent and successful of these launches, which have been eagerly bought by consumers without cannibalizing Kaldu Sari Nabati’s core portfolio.
The success of these new products stems from their strong, unique preposition in terms of bringing new and relevant flavors to the local palate of Indonesian consumers.
The Nextar product is one of the most successful new product launches in the category, and continues to grow in the face of a general pattern that sees many new products’ growth slow a year after launch. Nextar has reached 10 percent penetration across Indonesia, while other new products launched in the category have only managed to achieve 5 percent.
What can other players in fast-moving consumer goods learn from Nextar?
The Nexar experience offers two clear rules for successful innovation:
- Create a Unique Proposition by Catering to Local Needs
Nextar brought to the market “nastar” and “brownies”, flavors that had not previously been available in a biscuit format. They are flavors close to Indonesian consumers’ hearts and are strongly associated with festive occasions. Nastar and Brownies are the top flavors among Indonesian consumers for cakes during holiday celebrations, and Kaldu Sari Nabati succeeded by recognizing this and adapting to the trend by launching Nextar.
- Bring the Excitement of Festive Occasions into Daily Life
Nastar and brownies might be the go-to-cake flavor option during festivals, yet affordability and convenience are likely barriers to more frequent consumption. Kaldu Sari Nabati launch of Nextar helps consumers overcome both issues, offering affordability and convenience at the same time. They offered the new products at a broadly affordable price point for middle-to-lower-class consumers, between IDR 2,000 and 7,000, with wide availability not just in large supermarkets but also small-format neighborhood stores. Not only that, Nextar focused on establishing good availability beyond key cities, in rural areas. By overcoming the two challenges of affordability and convenience, Nextar became a product that consumers could choose for everyday consumption, not just specific festive occasions.
The lessons from these launches are that biscuit makers specifically and FMCG producers in general need to engineer their growth by expanding their portfolio and building a meaningful brand. One of the clear ideas to emerge from these launches is the power of adapting products usually consumed on specific occasions into something that can become part of everyday life. Balancing a product range with the most relevant needs of the market is at the heart of success.