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Chocolate seeks new pastures

Bitter or sweet, chocolates, once the occasional indulgence for many Indians, is now a frequently consumed item, and is powering ahead for growth as wealthier tongues seek richer tastes in a booming economy. Ruchi Hajela tells us more.

india Updated: Mar 28, 2008 21:19 IST
Ruchi Hajela

Bitter or sweet, chocolates, once the occasional indulgence for many Indians, is now a frequently consumed item, and is powering ahead for growth as wealthier tongues seek richer tastes in a booming economy.

Small is beautiful for boutique chocolatiers who are busy brewing fancy new ideas on the same old delight, while corporate giants are bracing for a volume war built around increasingly affordable prices.

While the increasing number of confectioners who make hand-made chocolates bet on select buyers for whom a specially made chocolate is a modern day status symbol, established players are positioning chocolates as an alternative to sweet for the entire family or as an anytime snack.

“Players like Cadbury and Nestlé have also introduced chocolates in smaller packs, costing less than the regular packs to have larger penetration in the market,” Tushar Bhattacharya, Senior Economist, FICCI, told Hindustan Times.

Swiss-based Nestle is increasingly aggressive in the market, and this week introduced two new variants-- the Kit Kat Chunky that can be had in small portions instead of an entire wafer – and Kit Kat Mini, which at only Rs. 2 per piece, takes what was once a luxury item in the nation within the reach of even urban slum-dwellers.

“Kit Kat Mini is an innovation that will introduce this successful brand to a much larger population. It is being test marketed at Rs.2 in the East and West India and will leverage Nestlé India's fast expanding distribution reach, which is now the largest in the chocolate category,” Nestle said in a statement.

Nestle is now targeting the chocolate as a “lighter eat” for breaks—apparently with an eye on volume growth.

Said Stewart Dryburgh, General Manager ( Chocolate and Confectionery): “We have effectively used our global expertise and insights to continuously innovate and create new segments that are relevent to our consumers.”

Industry leader Cadbury, which for long has been a synonym for chocolates in India, has largely focused on its Dairy Milk brand and has through its advertising campaigns projected chocolate as an alternative to Indian sweets bought from the local “halwai.”

“India is a vibrant country of many festivals and religious occasions and sweets are an integral part of every Indian meal. Our advertising has been focused on creating social and personal meetha moments for consumers to enjoy with Cadbury chocolates,” Ransom D’Souza, Associate Vice- President, Cadbury India, told Hindustan Times.

Some of the powerful ad campaigns of the brand include the one that says Pappu pas ho gaya (Pappu has passed--which celebrates the graduation of an ordinary Indian student laggard), another that sells ‘The real taste of life’ and a pitch built around the theme Kuch Meetha Ho Jaaye (Let there be something sweet). All these position chocolate as a thing to be relished with the entire family.

According to industry chamber FICCI’s survey of the food and beverage market in India, the country’s chocolate market was estimated to be worth Rs 1,100 crore approximately around August 2007. Cadbury India and Nestle India together account for about 90 per cent of the total market. Market research firm AC Nielsen estimates India’s domestic market for chocolates at Rs 1,500 crore, in which Nestle’s share is about 27 per cent.

While factories roll out packaged chocolates for the mass market at affordable rates, at the other end of the business, the market for hand-made chocolate comprises of small players most of who are in the business out of sheer passion.

In Delhi, Rashmi Kandhari, a doctor by profession and a chocolatier by choice, runs her own brand of hand made chocolates called ‘Sinfully Yours’ from her house.

“Chocolates are evergreen and people pick up a box while going to simply see someone,” she said. Quite obviously, buyers of these made-to-order chocolates are not kids but discerning adults.

Kandhari’s major buyers are the corporates and the wedding season is also a major draw for her when she sells about 300 boxes per wedding. “Most people wish to spend between Rs 150-Rs 250 per box and we get orders from around four to five weddings in the season,” Kandhari said.

Another Delhi confectioner, The Chocolate Boutique, which has been in the business for eight years, makes customised hand-made chocolates for special occasions and sells about 100 –150 kg a day during winters or during the wedding season.

“No adult wants his/her chocolate to be a branded one that doesn’t have any differentiating factor about it,” says Sanjiv Obhrai, owner of the boutique that offers a wide range of chocolates varying from Rs 6 for a single piece to as high as Rs 3,000 per kg for the premium ones.