Nestle maker of Maggi noodles and Kit Kat bars, plans to challenge Ferrero and Mondelez in the premium chocolate market in India by launching pricier variants and brands from its global portfolio.
While Mondelez controls nearly two-thirds of the chocolate market, Nestle claims that within its core focus — wafercoated and white chocolate — it is by far the market leader with 64% share. The Swiss company will relaunch Alpino early next month and will also launch a remium European range of chocolates under the brand.
“Along with the traditional bon bon format, we are also launching premium European range of chocolate bar with Alpino in a month entering the premium category. These are traditional European recipes that are about 130 years old. Milk chocolate, bitter sweet chocolate and a 70% dark chocolate are the variants. So we are also entering multiple technologies with this particular brand,” said Nikhil Chand, general manager-chocolates and confectionery at Nestle India.
This is part of company strategy to widen product portfolio beyond key categories and reduce dependence on Maggi following last year’s controversy.
Nestle launched around two dozen products across key categories during the last six months. In the chocolate segment, the company introduced two new products — Munch Nuts in January and Kit Kat Duo in February — and will soon launch another variation of their top selling and most widely distributed brand Munch, called Munch Trio.
The company has more launches in the pipeline, especially in the Rs 10 price point, said Chand. “There have been no innovations in the category and it is the biggest. So we decided to launch Kit Kat Duo in the Rs 10 segment with a unique combination of white and dark chocolate,” said Chand. The company is also trying to revive its brand Bar One with launch of a limited edition Bar One Charge.
Last June, food regulator FSSAI had banned Maggi following a high court order which deemed it unsafe and hazardous for human consumption having found high amount of lead and monosodium glutamate.
As a result, existing stock worth Rs 213 crore was withdrawn from the market and Maggi remained banned for five months.
Chand, however, said that while the impact of the ban was far reaching and across the portfolio it didn’t stop people from buying their chocolate products and that the category is only growing.
He added that Nestle India’s chocolate business, which accounts for 12% of the entire portfolio, grew 1.8% in the last 6months.
Nestle India’s chocolate division reported revenues of Rs 1,110 crore during calendar 2015. Mondelez, which sells Cadbury chocolates, still dominates the segment with annual revenues of over Rs 6,500 crore. It has invested $190 million on a manufacturing facility in Andhra Pradesh, its largest in the Asia-Pacific region.
But rival Ferrero has been on an aggressive investment spree. Recently, passed a resolution to invest Rs 375 crore in the Indian arm and double its authorised capital to Rs 1,500 crore, as per latest regulatory filings. Around a year ago, it had raised its borrowing limit to Rs 2,500 crore and said it will invest Rs 367 crore.
The Indian unit of US-based Mars Inc, too, has announced an investment of Rs 1,005 crore to set up manufacturing plant in Maharashtra.
Source: Economic Times
