Toblerone Coming in India
Cadbury India will soon launch parent Kraft Foods’ legendary triangular Swiss chocolate brand Toblerone to take on Italian brand Ferrero Rocher in the premium chocolate market. The country’s largest chocolate maker plans to price Toblerone competitively, market it aggressively and sell it more widely than what different third-party importers presently do, a senior company official said.
Toblerone is the world’s largest selling chocolate brand in dutyfree and travel retail, the official said. Every single bar of Toblerone is produced at Berne in Switzerland, and about 96% of the total production is shipped to other countries. The brand accounts for 40% of Switzerland’s total chocolate exports.
What has prompted Cadbury to bring in Toblerone is the tremendous success of Italian rival Ferrero’s Ferrero Rocher brand in the country.
“While Cadbury tried tapping the top end of the market with Silk, it hasn’t worked as well as expected and hence necessitated the launch of Toblerone,” the company official said.
A Cadbury India spokesman refused to confirm the development. “We continuously evaluate opportunities available to us and will bring products to the market as and when appropriate,” the spokesman said in response to a questionnaire on the launch of Toblerone and competition from Ferrero Rocher.
Cadbury plans to launch several pack sizes of Toblerone in India at a price range of . 50-400, retail and trade sources said. At present, Toblerone’s entry price varies between . 55-80 per pack of 50 gm. Cadbury’s premium chocolate brands like Celebrations, Bournville and Dairy Milk Silk have been under pressure ever since Ferrero set up its Indian subsidiary four years ago.
Ferrero Rocher has 4%-5% share in the estimated . 2,500-crore chocolate market despite having an entry pricing of . 60 per pack of 37.5 gm and much less market penetration than Cadbury India, an industry veteran who did not wish to be quoted said.
This makes Ferrero Rocher the segment leader as premium chocolate market is estimated at 10% of the overall market. Cadbury India has some 25 SKUs in premium end, while Ferrero has 16.
The Italian firm now plans to start local manufacturing of Ferrero Rocher to reduce prices and gain market share.
An email sent to Ferrero India MD Rudolph Sequeira on its plans and the way it has challenged Cadbury’s dominance did not elicit any response. Attempts to reach him on phone too failed. Cadbury has more than 70% share in the Indian chocolate market. However, competitors like Amul and Nestle are revamping their offerings at the massend while newer players including Ferrero has nibbled into its share at the premium end.
Experts feel the launch of Toblerone by Cadbury India can change the market dynamics and will increase average selling price of the category. “Toblerone as a brand has a strong brand recall for at least three decades now. So the brand can ride on Cadbury’s vast distribution network across India as there is a lot of demand for imported chocolates even in Tier II cities,” Alpana Parida, president at brand consultancy DY Works, said. Devendra Chawla, president (food and FMCG) at the country’s largest retailer Future Group, said Ferrero built the premium chocolate category in India.
Ferrero Rocher became an instant hit in India for gifting and during festive seasons as consumers brought it as an upgrade version of the traditional mithai (sweet) box. “It’s the new age gift with laddu shape and traditional gold color which Indians can relate to easily,” Chawla said.
He said launch of Toblerone would spur consumption growth of the category, as currently there are only a handful of players in this segment. A Euromonitor report last year said indulgence products like chocolate are boosting the growth of the Indian confectionery market. Urban population in India is set to increase by 46 million between 2010 and 2015, driving demand for processed food like chocolates, it said. Since 2010, when Cadbury was acquired by Kraft, the Indian arm has tasted success with two Kraft brands-—biscuits with Oreo and fruit juices and beverages with Tang.
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