Companies

Price is no bar for that premium chocolate

Meenakshi Verma Ambwani Tomojit Basu New Delhi | Updated on April 06, 2015

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Chocolate-makers upgrade offering to satisfy the sweet craving



Indian consumers are fast becoming more discerning when it comes to satisfying their sweet cravings, even at a premium.

While the likes of Mondelez India and Nestle India are wooing consumers by upgrading their existing portfolios and bringing in global products, domestic companies such as Amul are also looking to become a sizeable player in the premium chocolate category.

The domestic chocolate market is estimated to be worth ₹6,000-7,000 crore with premium chocolates accounting for just 10-12 per cent. Experts, however, say it s growing and there’s sufficient buzz in the category.

“Chocolate hasn’t traditionally been the sweet of choice in Asian markets but as the economies are growing, the demand for indulgent treats has also seen a visible upward movement. Adult consumption of chocolates is growing at the fastest pace in India,” said Prashant Peres, Director, Marketing, Chocolate, Mondelez India.

The company believes it created the space for premium chocolates in the Indian market with products such as Bournville and Temptations. Last year, Mondelez brought Cadbury Glow into the luxury gifting space, and recently launched Cadbury Dairy Milk Silk Caramello.

Great potential

“Premium chocolates have seen explosive growth since 2010, which was led by Mondelez… It has been identified as a key growth platform for Mondelez International’s long-term chocolate strategy and Mondelez India’s vision is to be the undisputed leader in the premium chocolate market,” added Peres.

Mondelez’s rival Nestle India launched the Alpino in 2013 and has been tweaking its portfolio to add more premium products. It recently launched Kit Kat Senses, which the company says has been made with a unique process of premium chocolate making called the ‘Slow churn process’.

“Chocolate penetration is still low, hence, there is great growth potential for both premium and regular chocolates. On one hand, in the high-end category, consumers are looking for an enriched experience. On the other, there is always a potential to tap the low-end entry level customers,” said Mayur Bhargava, General Manager, Chocolates and Confectionary, Nestlé India Ltd.

“The challenge for us is not so much to maintain our dominant share but to expand the chocolate pie,” added Peres.

For domestic giant Amul, the endeavour is to not just provide a quality product, but also flatten the perception that premium chocolates meant imported ones.

Domestic players

The company, which launched its premium variants in late 2012, now makes chocolates that are “foreign” in terms of packaging and taste, but Indian in terms of pricing.

“Reasonable pricing has always been Amul’s strategy so we maintained that policy for the premium products. The performance has been excellent. Five years ago, distributors used to complain that our people were dumping chocolates on them. Now they call and say they ask for it, but don’t get it,” quipped RS Sodhi, Managing Director, Gujarat Cooperative Milk Marketing Federation (GCMMF), which owns the Amul brand.

Sodhi stated that the company was seeing greater potential in the premium category, which is why Amul will launch three new variants — Hazelnut, Belgian Chocolate, and a fruit-infused chocolate containing blueberry, cranberry, etc. — over the next two months. This is in addition to six variants already available in the market. Chocolates account for just ₹100 crore of Amul’s ₹20,730-crore business.

“These chocolates are selling like hot cakes and it’s difficult to meet demand since chocolates account for a fraction of Amul’s returns. We are currently operating out of one unit which produces between 250 and 300 tonnes a day. We will consider expanding if returns stay steady,” he added.

Published on April 06, 2015

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