ITC eyes expansion of its chocolate segment, looks to offer unique variants

Expanding the reach of its chocolate division, food-to-hospitality major ITC is laying the ground to go national by expanding into smaller cities.
 
The company’s chocolate products, which were launched in 2016, are available only in six cities — Bengaluru, Delhi, Mumbai, Kolkata, Chennai, and Hyderabad.   
 
“We are the top players in all the categories that we have entered. Our ambition is to put ourselves in that position in chocolates segment too over the next decade,” said Anuj Rustagi, chief operating officer (chocolates, confectionery, coffee & new categories), food division at ITC.
 
The Kolkata-headquartered conglomerate, which has set a target to achieve
 
Rs 1 trillion from the FMCG business, says food will form 60-70 per cent of that revenue. The company expects chocolates to become one of the top five categories in the food business.
 
The Rs 11,000-crore Indian chocolates market is dominated by Mondelez, which commands over 60 per cent share, followed by Nestlé and Ferrero.
 
Experts are of the view that ITC is preparing itself well to become a national chocolates player five-six years down the line. “Yes, it is likely (happen) given that ITC has done quite well in most of the food segments, (while it) has dairy sourcing capability, and has ability to spend on advertising,” said Abneesh Roy, executive vice-president at Edelweiss Securities.
 
According to Rustogi of ITC, the top metros are the biggest consumers of chocolate products. For example, the demand from Bengaluru alone is ot par with the rest of Karnataka. Hence, the company wants to go deeper into these metros before expanding to other cities.
 
ITC is setting up kiosks in malls to increase the outreach of its luxury chocolate products which were only available at the company’s boutique hotels until now. It also has plans to take the kiosk model to airports as well.
 
The company is coming out with newer variants of chocolates to create a unique identity. Apart from dark, milk and white chocolate, it has brought a fourth variant of ruby chocolates which has a mild fruity taste and pink in colour. “We do not want to bring a ‘me too’ product but unique offerings,” said Rustagi.
 
ITC, which entered the mass premium chocolate range in October 2018 with a price point of Rs 70-200, is eyeing to widen its access through lower price points. Its luxury offerings cost anywhere between Rs 350 and Rs 15,000.
 
Presently, the company produces mass premium chocolates from its Haridwar plant, which has a capacity of 5,000 tonnes per year. For future demand, it is identifying newer sites to set up production plants.