Chocolate Wars: Vying for festive spoils

Ayushi Kar October 31 | Updated on October 31, 2021

This Diwali, confectionery makers like Mondelez, Amul, Mars Wrigley, Fabelle and Smoor are upping their premium offerings

The Purple Room would delight the soul of Willy Wonka, the candy man from Charlie and the Chocolate Factory. At Mondelez’ just launched experiential chocolate store at Jio Drive Mall in Mumbai’s BKC area — timed sweetly with Diwali gifting time — a 3D chocolate machine steals the spotlight. You can use this to create personalised 3D printed premium Cadbury chocolates.

Close to the Mondelez outlet is the first M&M experience arena, launched by Mars Wrigley, with much fanfare – again timed to coincide with the festive season. The store, complete with an interactive dispensing unit at Jio World Drive, has been set up in partnership with Reliance Retail and is a candy wonderland.

Swing east and ITC’s Fabelle has come out with some sweet inducements too for Diwali. The luxury chocolate maker has launched a unique Heart of Gold Collection — pralines with 24-Karat pure edible gold crafted by Michelin Star chefs and master chocolatiers.

Diwali is always a sweet time for chocolate makers — but this festive season, the battle for the consumer’s tooth has heated up like never before. And everyone from Mondelez (Cadbury), Amul, Mars Wrigley, ITC’s Fabelle, Hatsun Agro’s Ibaco chocolates and newer brands like Smoor are focusing on the premium segment. While the premium segment enjoys a mere 10-15 per cent share of the over ₹10,000 crore chocolate market, it is forecast to grow at a 25-30 per cent growth rate. Not surprisingly, everyone wants a bigger slice of the premium pie.

Silk Route

It was not too long ago that for most Indians, Cadbury’s much loved, ₹10 Dairy Milk was synonymous with chocolate itself. Over the past decade, with Cadbury’s foray into Silk, a bar of which costs far more, the premiumisation of the segment began. “Now, starting from zero almost a decade ago, a third of our business is in the premium segment, which we will continue to grow,” says Anil Viswanathan, Senior Director— Marketing, Mondelez India.

While Cadbury maintains market share supremacy (it enjoys 40 per cent of the overall market share, according to Viswanathan), it has to watch out as others are upping their premium play.

Dark Revolution

Dairy major Amul is grabbing the dark chocolates niche in a big way. The farmers’ cooperative had forayed into the chocolate space in 1973 to support cocoa farmers of South India and help them realise remunerative prices. But it was only after four decades, Amul chocolates started making its presence felt, when in 2016-17 it launched ‘Single country origin dark’ varieties from Venezuela, Peru, Ghana, Tanzania among others. The dark chocolates contain upto 75 per cent cocoa content, making it rich in nutrition and experience.

Strategically, besides making its niche with cocoa-rich content, Amul also revamped packaging and the size of chocolate, by introducing a 100-gram chocolate bar — an ‘unconventional’ size till it was launched. Amul, today, enjoys about 10 per cent market share in the chocolate category and this division fetches a little less than two percent in revenue for GCMMF.

Going Gourmet

ITC, meanwhile, is using its institutional strength of hotels and master chocolatiers to muscle up in the luxury chocolate category with its Fabelle brand. According to Anuj Rustagi, Chief Operating Officer — Chocolates, Confectionary, Coffee and New Businesses, “We are ahead of many new brands trying to enter this space. Fabelle is also in a pole position in e-commerce. We started our D2C business over two years ago and today, e-commerce contributes to about 40 per cent of the Fabelle business.”

Meanwhile, Hatsun Agro, which makes popular brands of ice creams, Arun, and the premium Ibaco, is leveraging its 162 exclusive Ibaco outlets to retail its chocolate range as well. It has 12 variants of Bon Bon chocolate and seven of bar chocolate.

But there are new brands edging into luxurious chocolates. Take Smoor, a fast growing ‘Imagined in India’ D2C brand, that is expanding fast. The brand, which started in Bangalore, has recently entered the Chennai market and Smoor’s Founder and CEO Vimal Sharma has set his eyes on capturing a chunk of the luxury chocolate market, “The luxury chocolate market in India is estimated at ₹3,500 crore and we are seeing good double digits growth y-o-y. Smoor hopes to capitalise about 10 per cent of this market in the next five years with our offline and online expansion,” he said.

Why premium

What’s behind the premium strategy of chocolate makers? According to Jermina Menon, Founder and Chief Strategy Officer, Knoweti, a boutique business strategy and retail marketing consultancy, “Consumers for the premium market have far more disposable income to indulge and create a significant demand. During these past two to three years, the premium category has seen an explosion with the help of social media and is popularising gourmet foods with shows like Masterchef. Chocolate is no longer a food — but an experience, where premium players can enter to provide a wide variety of products to satiate this desire.”

Mondelez’s (Cadbury) Viswanathan is, however, not too concerned about the new entrants, “India is a big market, it is only natural for new players to come in to offer a variety of products to consumers. We have always remained one step ahead in the game to innovate and bring our consumers new products. It is only validating for us to see competitors innovate along similar lines, since they are confirming the trend,” he says.

(with inputs from Rutam Vora)

Published on October 31, 2021

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