The Indian chocolate market, which is estimated to be over Rs 8,500 crore is dominated by Mondelez (formerly Cadbury India), with other strong players like Nestle and Amul eyeing a larger pie. In the recent years, multinational firms like Mars and Fererro have also made inroads in select segments. Now the US major, The Hershey Company, commonly called Hershey's, is also looking to scale up operation in the Indian market.
Hershey's has been present in India for almost a decade. It had entered the market through a partnership with Godrej Group, but the two parted ways a few years later. Despite being here for nearly 10 years, the company largely focused on categories like syrups, spreads, milkshakes, cocoa powders and candies. Two years ago, Hershey's took its first big step in the chocolate category it is synonymous with, by launching Brookside, a brand made of dark chocolate on the outside and exotic fruit flavours on the inside.
Now aiming for a bigger push in the market, it is launching the Kisses brand in India. Kisses has been an iconic brand for Hershey's and nearly 70 million Kisses are made worldwide each day. It is a brand Hershey's has long been known for world wide. Now Kisses will also be made in India, starting with three variants initially.
For now, its only being launched across south India, with key targets being the modern trade retailers, larger general stores and e-commerce companies. It will be launched in other parts of the country after building the brand in the south, which accounts for a third of India's chocolate market. Given that getting the cold supply chains right will be extremely critical for a product like Kisses, it will be predominantly available in the urban areas, where the chocolate market is growing at around 11 per cent per year.
“There are elements in the south that will allow us to learn. Chocolate is complex and very different from many of the other products we make and sell. So, having the right cold chain set up, making sure you have the right stores that can handle chocolates and ensuring that it gets to the consumers in the right way... there's just a lot that goes in to that and the south has number of elements that allows us to hone that,” Steven Schiller, president, international at Hershey's told THE WEEK.
Over time, Hershey's sees huge growth opportunities in the Indian market, particularly in the snacks category, given the young population and strong economic growth.
“Within the international model, as I look at each of our focused geographies, there is probably more potential in India than any other market. The sheer size of the population, a young population, the economy is very strong, which is driving a lot of purchasing power for consumers, just creates a ripe environment for people to partake in the snacking spectrum that we offer. The opportunity is in front of us and India will become a bigger and bigger piece of the company's performance,” Schiller said.
The company's four brands currently sold in India have seen 50 per cent growth, added Schiller. Hershey's has targeted investments of $50 million in India over a five year period, and the company officials say it has strong strategic plans in place.