Emerging Markets: India
Premium Indian chocolate race heats up with Cadbury Glow and Kit Kat Senses
A recent report by ValueNotes predicts India’s $966m chocolate market will register a compound annual growth rate of 16% up 2019, driven by the premium sector and dark chocolate as disposable income grows.
Nestlé and Mondelēz command 80% of the market and have launched lines to capitalize on the anticipated premium chocolate boom.
Kit Kat Senses: ‘Slow-churned chocolate’
Nestlé has introduced a premium variant on its global bestselling confectionery brand for the Indian market. Kit Kat Senses is a wafer coated with “slow churned chocolate”.
Nestlé says the milk and dark chocolate coatings use a cocoa mass that is churned for 12 hours to provide a rich and smooth taste.
Conching a cocoa mass to develop smell and texture can take as little as 15 minutes for high shear conches and as long as three days in some processes.
Nestlé previously used the Kit Kat Senses brand name for a cream-filled chocolate wafer product that was launched in Europe and Canada in 2008.
The Swiss-headquartered firm has also launched another ‘slow churned’ chocolate under its own brand for the India market. Nestlé Extra Smooth is a milk chocolate that comes in 18 and 36 g tablets and uses Ghanaian cocoa beans.
Cadbury Glow: QR codes to unlock personalized multimedia content
Mondelēz’s latest answer to the premium segement is Cadbury Glow - a gifting product that can be personalized with multimedia content.
Consumers can create a personalized note for their Cadbury Glow gifts and also have the option to add videos, songs and photos accessible by scanning on-pack QR codes with a cell phone.
“Initial results have been strong, already reaching 13% of the Indian chocolate gifting segment last quarter,” said Mondelēz CEO Irene Rosenfeld during the company’s fourth quarter earnings call last month.
The brand adds to Mondelēz’s premium arsenal for India that already includes Cadbury Dairy Milk Silk and gifting brand Cadbury Celebrations. Last year, the firm also premiumized its Cadbury Bournville brand by upping the cocoa content and swapping red packaging for black to appeal to India’s rising middle classes.
What about Mars, Hershey and Ferrero?
India chocolate fact file:
Fiscal 2014 values sales: $966m
Fiscal 2019 forecast: $2bn
Dark chocolate: 9% of sales
Milk chocolate: 75% of sales
Annual Per capita consumption: 120 g (up from 50 g in 2005)
Mondelēz is the Indian market leader has a 62% share, but faces competition from other large multinationals and new entrants.
Number three player Mars holds a 6% share and last week earmarked India as a high priority market’ as it unveiled plans for its first Indian chocolate plant in a $160m investment. Mars launched premium tablet chocolate brand Galaxy (also known as Dove) in India at a reduced price point in late 2013.
Hershey now has its own subsidiary in India after ending a joint venture with local firm Godrej in 2012. The US firm has a plant in Mandideep and also manufactures in Chittoor through acquired company Nutrine Confectionery.
Ferrero launched its Ferrero Rocher brand to India in 2007, but only holds 3% of the chocolate market, according to ValueNotes. The company has local manufacturing capacity in Baramati.
Local firm Rajhans (Desai-Jain) Group – whose prime business is real estate - made its first foray into the confectionery industry by launching its Schmitten brand in India late last year. It told ConfectioneryNews it was aiming to be the domestic market leader in premium chocolate.
Japan's luxury chocolate maker Royce also entered India’s premium chocolate segment in 2013.
Euromonitor International reports that premium Swiss chocolatier Lindt continued to gain market share in 2013, expanding its presence in premium stores, such as Brown Tree, and urban areas.
The research organization also notes how traditional Indian festivals, Diwali and Raksha are creating gifting opportunities for premium chocolate.