Candy rush: How Pulse got it right

How a tangy innovation made a breakthrough in the stagnant candy category and clocked Rs 150 crore in the first year of its launch

Shruti Venkatesh
Published: Aug 17, 2016 06:24:24 AM IST
Updated: Aug 11, 2016 02:52:05 PM IST

I love a good story, be it through advertisements, movies or an entrepreneur who dared to think differently. I believe in bringing in fresh perspectives -- to a corporate profile or a Facebook post -- like new wine in an even newer bottle. I graduated with a journalism degree from the Xavier Institute of Communications. My weekend rituals involve watching Bollywood movies and reading up on style trends.

Candy rush: How Pulse got it right
Image: Amit Verma
“Your eyes should close automatically to relish it,” was DS Group vice chairman Rajiv Kumar’s brief to the R&D team working on Pulse candy

It was a simple, one-line brief: Agar product chatpata ho, toh aapki aankh bandh honi chahiye, varna maza nahi aaya (if the product is tangy, then your eyes should close automatically to relish it, or else it is no fun). That was the lone instruction from Rajiv Kumar, vice chairman of the DS Group, for his R&D team working on the Pass Pass Pulse candy. So far, it has proved to be the only one that matters: Within a year of its launch, Pulse contributed over Rs 150 crore to the DS Group’s kitty. A mere drop when seen against the approximately Rs 7,700 crore that the group clocked in FY16, but significant considering the time frame, and the fact that it came from a hard-boiled candy priced at Re 1.

The DS Group is no stranger to the confectionery segment. The 88-year-old, tobacco-to-hospitality conglomerate has other offerings in the market (Pass Pass and Chingles), but Pulse candy, its latest, seems to have added spice to a stagnant market. The raw mango-flavoured hard-boiled candy (HBC) with a piquant powder filling in the centre hit the sweet spot with adults and children alike, getting just the reaction Kumar wanted. Hashtags like ‘#PulseofIndia’ to memes like ‘my face when I am eating a Pulse Candy’ have trended organically on social media platforms like Twitter, Facebook and Instagram since its launch in April 2015. Not to mention the fact that over 150 crore units have been sold, despite competition from an established player like Parle, whose Mango Bite and Kaccha Mango Bite are priced lower at 50 paise.

 “We knew the product would be successful, but the consumer response has surprised us,” Kumar, 53, tells Forbes India. At the heart of this success, he believes, is the group’s focus on maintaining quality with every innovation. “We never focus on bottom lines; if the product is fine, then bottom lines have to come. Most of our R&D projects involve a lot of time, and that is our biggest investment. We don’t launch till we are completely confident about the product,” he says. The company spent almost two years developing Pulse candy, while Pass Pass took over five years before it was launched in 1999.

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At one point, almost 80 percent of the group’s revenue came from its tobacco brands—Baba Elaichi and Tulsi. The group has consciously diversified into various verticals like mouth fresheners (Rajnigandha in 1983), FMCG (Catch Spices in 1987), confectionery (Pass Pass, 1999), hospitality (2000), and B2B businesses like packaging in 2001. As a result, the tobacco business currently accounts for less than 20 percent of total revenues. The mouth freshener category makes up about 55-60 percent, and food and beverages (which includes Catch Spices, Pass Pass and its dairy brand Ksheer) has grown to 20-25 percent. The focus now, Kumar says, is on developing the foods and beverages and the confectionery verticals.

This attention is not misplaced. “The overall confectionery market is around Rs 6,000 crore, out of which HBC is around Rs 2,400 crore. The overall market is growing strongly, but HBC is growing at 24-45 percent,” says Rajat Wahi, partner and head, consumer markets, KPMG.

With Pulse, the idea was to bring in some innovation in the hard-boiled candy segment, where changes are typically restricted to newer flavours. At the outset, they had observed that raw mango and mango flavour together constitute about 50 percent of the total candy market in India—of this, almost 26 percent was raw mango. It was clear to them that this was the flavour they wanted to innovate on. “Kaccha aam as a flavour is loved across all age groups and demographic markets. So the right balance of this raw mango flavour mixed with tanginess gives you a very different feel and that’s what has clicked,” says Shashank Surana, 29, vice president (VP), new product development, DS Group. He also believes the candy market was largely skewed towards children, not so much the youth and adults. They sought to address this gap with Pulse. “Today, when I go to a general store, I don’t ask for a mint candy or a fruit candy. I ask specifically for Pulse and also tend to buy it in more numbers than I would usually buy candies earlier,” says Shweta Thosani, a 23-year-old media professional.

Candy rush: How Pulse got it right
Image: Amit Verma
On fake Pulses flooding the market, Shashank Surana, vice president, new product development at DS Group says, “Imitation is the best form of flattery.”