Geneva's Du Rhone hopes to capitalise on the growing luxury market in India

Well-heeled Indians will now get a taste of pure chocolate indulgence in their own backyard, courtesy Du Rhone. The Geneva-based company has just opened its first Indian outlet and its fifteenth globally, at the tony Peddar Road neighbourhood in Mumbai.

The brand, known for its hand-made chocolates and centuries-old recipes, does not use chemical additives or industrial preservatives. Instead, Du Rhone’s pralines are made from top-quality cocoa beans infused with organic ingredients, says Federico Marangoni, fifth owner of Du Rhone, which derives its name from Geneva’s luxury shopping destination — Rue du Rhone.

That Du Rhone has been the go-to chocolatier for politicians and celebrities alike including names such as Winston Churchill, John F Kennedy, Grace Kelly and Audrey Hepburn is endorsement enough of its international brand appeal.

Du Rhone hopes to draw consumer attention in India using a combination of product ingenuity and history.

That domestic chocolate consumption is a fraction of what it is internationally barely deters Marangoni, also the CEO of Du Rhone. “Average consumption of chocolate in India ranges between one and two kg per person a year. In Switzerland that number is at 12 kg a year. Even if the consumption of chocolate goes to two kg a year in India, the market would grow by a lot,” he says of growth prospects here.

While Du Rhone landed in India first, if it succeeds, Confiserie Läderach, Confiserie Sprüngli and other international luxury chocolate brands may follow suit. Though the overall chocolate market in India is estimated to be in the region of Rs 85-90 billion, the premium end is a third of it, at Rs 28-30 billion. The luxury chocolate market, say experts, constitutes a small portion of the domestic premium chocolate segment. It has potential for growth though, given the surge in disposable incomes as well as aspirations.

A Mahendran, chairman and managing director of Global Consumer Products, which launched chocolate brand LuvIt three years ago, says the luxury or super premium chocolate market in India is highly under-penetrated, even when compared to allied East Asian countries. And like other consumer goods, it is all about pricing.

If chocolates marketed by the larger mainstream brands cost around Rs 2 or less per gram, LuvIt prices itself at around Rs 4 per gram, Japanese chocolate brand Royce at around Rs 10-Rs 12 per gram whereas Du Rhone would be retailing for almost Rs 20 per gram or Rs 200 per piece. While officials with Du Rhone don’t see their business as a commoditised one, the big challenge for them would be to not only educate, but also discover who their customers are and where they are located.

Marangoni’s personal take is that high-end chocolate is not just another consumer fad. It is an indicator, he says, of where the luxury market in general is headed within an economy. He also says that the company does custom chocolate production and distribution for high-end watch brands such as Patek Phillipe, and is in talks for doing the same with Piaget and others.

Back  to basics

Setting up shop at Peddar Road though is a start, given the higher income residents that live there. Marangoni is focused on getting the name to be known through a local partner Liberty Luxuries, building a catering and gifting business and selling anywhere between 500 to 800 kg of chocolate a year. The Geneva stores (of Du Rhone) sell around 8,000 kg of chocolate a year and Harrod’s in London sells 200 kg of chocolate a year.

Next up is a store in New Delhi and then two more in metro cities, Marangoni says, over the next couple of years. But Mahendran opines that a small boutique in an upscale neighbourhood may be one way to begin. However, to generate high volume sales another option would be to set up shop in a villa and host chocolate-tasting events regularly. “Invariably, when people come and like what they see and eat, they will also buy a box of chocolates,” he says.

Toshin Shetty, a Mumbai-based entrepreneur who launched his own hand-made chocolate brand Toshin a decade ago, divides the chocolate market into two broad groups: artisanal and commercial. “Today, consumers are aware of brands. But unless they travel internationally and consume products around the world, they can’t differentiate between very good, good and bad chocolate,” he says.

In that context, Du Rhone fills a niche that has no real competition in India yet. Royce of Japan, founded in 1983, and priced lower but closer to Du Rhone, comes in slick packaging and is premium with five stores in the country including the high-end Palladium Mall in Mumbai. But it lacks the romantic history that Swiss and Belgian labels do. Du Rhone, a 143-year-old brand, has no such hassles. That is a sweet way to start a business.