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Introducing a Premium Chocolate Brand in Kazakhstan

Introducing a Premium Chocolate Brand in Kazakhstan. Jagannadha Chaitanya Jayanti Yong-Jun Lee Zoheb Mohammed Hakjun Youn. Agenda. Introduction Target Market – Kazakhstan The Exporter – Barry- Callebaut Trade Cost Marketing Wrap-up. Target Market. Kazakhstan. Kazakhstan - Topography.

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Introducing a Premium Chocolate Brand in Kazakhstan

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  1. Introducing a Premium Chocolate Brand in Kazakhstan JagannadhaChaitanyaJayanti Yong-Jun Lee Zoheb Mohammed HakjunYoun

  2. Agenda Introduction Target Market – Kazakhstan The Exporter – Barry-Callebaut Trade Cost Marketing Wrap-up

  3. Target Market Kazakhstan

  4. Kazakhstan - Topography

  5. Modern Day Kazakhstan

  6. Why Kazakhstan?

  7. Demand Potential – Economic Growth Oil wealth: Real GDP growth average 8.6% during 2003-8 SWF: “National Oil Fund of Kazakhstan” – diversification of national wealth source

  8. Real GDP Growth Rate

  9. Demand Potential – Sector Growth Regard for European brands Cautious in choosing food products Emerging middle class Increase in number of Super Markets

  10. Rise in Minimum Wages Per Month

  11. Kazakhstan’s Trade Balance

  12. Demand for Chocolate • Chocolate consumption per capita • Overall spending % on sugar/confectionary way higher than the world average • Chocolate import • Growing at average of 22% for the last 5 years • Complementary goods • Consumption and demand for coffee increasing

  13. Chocolate Import of Kazakhstan

  14. Market Access • Friendly government policy to foreign trade • Trade freedom 41st from 183 countries (2009) • Reduced VAT • 12% since 2009, down from 15% • Member of the Eurasian Economic Community (EAEC) • Free trade from Jan. 2010

  15. The Exporter Barry-Callebaut

  16. Barry-Callebaut The Company Chocolate for Food Manufacturers: Supplies 35% of the world’s chocolate manufacturers. Chocolate for Artisans & Chefs: Offers ready to use and sell products Chocolate for Consumers: Home to Renowned Chocolate Brands – Jacques, Sarotti and Alprose.

  17. Barry Callebaut’s Geographic Spread

  18. World Wide Industry Growth

  19. Barry-Callebaut’s Growth Sales volume up by 14.6% Revenue up by 12.8% Geographic expansion and organic growth.

  20. Competitive Advantage Largest processor of cocoa in the world. 27,000 metric tonne production capacity in Russia. Controls 15% of world’s cocoa resources. Economies of Scale and density achieved by 40 production facilities around the world.

  21. Trade Costs From Russia with Chocolates!

  22. Import Tariffs Common Custom Union among Russia, Kazakhstan and Belarus Common Custom Space from Jan. 2010 + free custom duties + free of economic limitations + simplified custom formalities Unified Economic Space

  23. Shipping Costs

  24. The Chocolate Route MOSCOW ASTANA NOVOSIBIRSK ALMATY

  25. Shipping Costs Weight: 100g Size： 7.5 x 15.5 x 1 cm

  26. Shipping Costs

  27. Shipping Costs 20 Feet Container + Payload: 22 tons + 200,000 bars Freight Cost + Truck: max $4,000 + Train: probably cheaper Custom Clearance Charge: $40 to $3,000 Total Transport Cost: max $7,000 or ￠3.5/bar

  28. Exchange Rate against USD

  29. Tenge V/S Rouble

  30. Marketing Strategy The Customers and The Competition

  31. The Competition

  32. Kazakh(stan) answers

  33. Value Proposition European Brand Manufactured from freshly ground Cocoa Conforms to all health standards Premium Product at Affordable prices

  34. Promoting the Brand

  35. Wrap Up The Verdict

  36. Conclusion

  37. вопросы и ответы

  38. References Global Market Information Database Euromonitor Barry-Callebaut Annual Report 2008/9 Index of Economic Freedom 2010, Heritage Foundation & Wall Street journal World Tariff Profiles 2008, WTO World Outlook Report 2006-2011: Chocolate & Chocolate-Type Confectionery Products Packaged for Shipment UN Comtrade CIA Factbook Roshen: http://roshen.com

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