NEW DELHI: Upping the ante in a category dominated by Mondelez's Cadbury, American chocolate company Hershey's is rolling out its iconic chocolate 'Kisses' and moulded bar range across the country.
The company, primarily known for its syrups and spreads, is expanding retail presence of these products beyond South India where it first launched the products in 2018, nearly 110 years after it was introduced in its home market - the US.
"The large-scale roll-out is part of Hershey’s plan to invest USD 50 million in India, starting late 2017 and this is by far our biggest play in the chocolate category in India," Herjit Bhalla, managing director, Hershey India, told Express. "We have test-marketed the products in the southern states which accounts for a third of the chocolate market and it has delivered good results," he added.
Hershey’s Bar range will be initially imported from Malaysia and will be made available across 70 urban cities by the end of this month and 'Kisses' is made in India. "For Kisses, we have doubled our manufacturing capacity in India to meet the growing demand," he said.
Kisses will be available in three variants: the classic Milk Chocolate, Cookies 'n' Crème and the Whole Almonds starting at a price of Rs 50 for small packs and Rs. 140 for the bigger 108g pack.
Incidentally, the launch comes amidst a slowing economy when demand for most discretionary products took a hit. "We recognise that in the short term, the overall business environment has remained slack as demand was tepid, but we believe the market will rebound in another six months’ time," Bhalla said, adding that consumers are typically willing to pay a higher price for better chocolates as the industry is broadly witnessing consumption-led growth.
He added that in the last two years, its focus brands including soya milk brand Sofit, Hershey’s and Jolly Rancher have grown at 30 per cent CAGR.
Meanwhile, the Pennsylvania-based company is also working on consolidating its chocolate portfolio under the Hershey’s brand. For instance, it has already shifted its Brookside brand of chocolate under Hershey’s portfolio as Dark Exotic for the Indian market as consumers here are more familiar with the Hershey’s brand.
The move signals that Hershey is vying for a bigger slice of the domestic chocolate category valued at USD 1.4 billion with Mondelez controlling two-thirds of the market, followed by Italian confectioner Ferrero, and Nestle.
With the market growing 13 per cent, Bhalla said "It is usually ripe for category expansion. A new player, if they invest in the market can actually help drive the category." On a per capita basis, Indians consume roughly 120 grams of chocolate a year, the least among emerging markets, and ten times lower than developed markets.