Godrej Hershey plans to bring popular brands from abroad

Godrej Hershey, the 51:49 joint venture between the Godrej Group and American chocolate maker Hershey’s, will roll out some key brands from abroad — Kisses, Reese’s and Hershey’s Chocolate — in the country. The launch is likely in the next few months, say informed sources.

Kisses is a conical chocolate wrapped in aluminium foil. Reese’s is a chocolate candy and flagship Hershey’s Chocolate is a regular bar in different flavours, including milk, dark chocolate and extra dark chocolate. All are popular products in Hershey’s stable.

Vivek Mathur, managing director, Godrej Hershey, when asked, confirmed these products were in the offing, but refused to specify when. At present, the Rs 450-crore JV has just one product from Hershey’s — Hershey’s syrup — available in modern trade and high-end traditional retail outlets. Hershey’s chocolates, for the record, are available in the grey market.

But the fight, say experts, for market share will not be easy, thanks to the dominance of rival Cadbury in the Rs 2,000-crore Indian chocolate market. The latter has a share of 72 per cent to Nestle’s 24 per cent. The balance is made of Amul and other brands.

“It will be interesting to see how Hershey’s grabs market share from the two (Cadbury and Nestle),” says an executive with a fast moving consumer goods (FMCG) firm.

Mathur says the plan will be to launch innovative products at various price points. This tactic has been used well by Cadbury to ensconce itself in the leading position, say FMCG analysts. Cadbury practically straddles the chocolate need curve ,with the impulse-driven Cadbury Gems, Eclairs, Perk, 5 Star and Dairy Milk on one hand, and the more evolved Cadbury Celebrations, Temptations and Bournville on the other.

Price points vary from Re 1 for an eclair to Rs 5 for a Cadbury Dairy Milk, which goes up depending on grammage. Products such as Bournville have a price tag of over Rs 70 for an 80g pack.

In recent months, Cadbury has increased the price of a few products in response to input cost pressures. But it continues to dominate the chocolate market despite these price rises, say experts.

On confectionary, too, Cadbury is in the leading position with a share of 35 per cent, followed by Nestle at 14.5 per cent and Perfetti Van Melle at 14 per cent. Cadbury’s key confectionary brands include Halls, a candy, and Bubbaloo, a gum.

The confectionary market is Rs 4,500 crore in size and growing at 15 per cent yearly. The chocolate market is growing at over 20 per cent per annum, say experts.

Godrej Hershey also has a confectionery portfolio under Nutrine, an acquisition done by Godrej a few years earlier. Products there include Mahalacto, KokoNaka and Nutrine Eclairs, among others.

Mathur says the plan is to expand the Nutrine portfolio, even as the company looks at introducing Hershey’s chocolates in India.

“There is room to expand in the segments we are already in, including hard-boiled candies, eclairs, lollipops and fruit candy,” he says.

“We are not ruling out getting into new segments such as gums.”