LuvIt takes on the big boys in chocolates

Chocolates are available in key formats such as molded chocolates, enrobed wafers, panned chocolates

The ads strike at the heart of the matter. A young girl finds herself walking home late virtually every night much to the chagrin of her mother. The only relief from her mother’s diatribe is the bar of chocolate she bites into. It becomes a habit. 

Here’s another one: A young boy is surfing through channels. The visuals are alluring, drawing him into their world. His trance is only broken when he picks up a bar of chocolate from a tray placed in front of him. The chocolate melts in his mouth. 

The ads in question are for LuvIt, the newest kid on the block in the Rs 8,000-crore Indian chocolate market. Promoted by consumer goods veteran A Mahendran, who was formerly MD of Godrej Consumer Products, this brand appears to be pushing the peddle on innovation.

The chocolates, produced and distributed by Mahendran’s latest venture Global Consumer Products, are available in key formats such as molded chocolates, enrobed wafers, panned chocolates and caramel-nougat bars. The price points vary from Rs 5 to Rs 45 per unit, targeted at individuals between 20 and 35 years. 

Interestingly, Mahendran first launched the brand two years ago in the south, before taking it national now. There is a reason for the delayed launch into the national market, say experts. Mahendran knows the formidable competition he is up against —Mondelez’s Cadbury, Nestle, Ferrero, Hershey and Mars — all international brands that have been tried and tested globally as well as in India. 

Brands such as Cadbury and Nestle, in fact, have been around for decades in the domestic market, so both understand the Indian consumer well, experts say. It is natural therefore for Mahendran, who has worked on the chocolate category while at Godrej, to tread cautiously, they say. 

In a conversation with Business Standard, Mahend-ran, who has backers such as Goldman Sachs and Mitsui for his venture, says innovation was the only way he could have made a ripple in a market dominated by multinationals. “The irony is that while per capita chocolate consumption is still small in India, whatever market growth has happened in the country has been largely due to the multinationals. That isn’t to say that there have been no Indian brands at all,” he says.

Indian versus foreign Mahendran knows the power that a local brand can wield. Eleven years ago, Mahendran, while at Godrej, helped in the acquisition of Chittur-based confectioner Nutrine for approximately Rs 250 crore. The buy gave the Godrej Group access to brands such as Maha Lacto, Koka Naka and and Milk Eclairs, which together had helped Nutrine emerge as a strong player in the domestic confectionary market. Other players in the fray then included Parry’s (earlier part of the Murugappa Group, now part of South Korea’s Lotte Confectionary) and Perfetti Van Melle.

While US-based chocolate maker Hershey eventually acquired Nutrine in 2012, Mahendran believes that Indian brands if positioned well can make a splash in a space dominated by multi-nationals. “We were clear who we were targeting and what would appease them,” he says. Consumer feedback to surveys that the company conducted suggested that consumers were looking for chocolates that were indulgent and could melt in their mouths. “Our research and development team went back to the drawing board with these insights and looked at what ingredients could be combined to make an exciting chocolate flavour,” Mahendran says. While four variants are out in the  marketplace including one which has rice crispies, there will be more in the offing, Mahendran says. The accent, he says, will be on having interesting favour profiles and ingredients in the chocolates.

Incidentally, LuvIt’s national plunge, says experts, also comes at a time when there is no new chocolate brand launch round the corner in the category. While the existing players such as Cadbury and Nestle continue to come up with new products, experts say LuvIt will be the first new player in a while in the category. Regional experience, they say, will help LuvIt as it takes on the big boys.

“The southern states account for almost 30 per cent of the national chocolate market, so starting from here was critical,”Mahendran says without divulging market share data of LuvIt.

Industry sources say that while LuvIt has made the right moves in the south — it has south star Siddharth as its brand ambassador — it is still to make a significant dent in the market there. The brand is available across supermarkets, general stores, bakeries and chemists in the south, a strategy the company proposes to replicate in other parts of the country too.

Additionally, LuvIt will be extended to confectionary in a bid to expand its portfolio. The first few steps have been taken with the launch of LuvIt lollipops and eclairs recently.