Bitter Sweet

Everyone likes their chocolates sweet, but the players in the Rs.7,500 crore Indian market are fighting a bitter war. For almost two generations, Cadbury has been synonymous with chocolate and Swiss major Nestle, a distant second. The dominance of the UK brand, now owned by US-based Kraft and rechristened as Mondelēz, is evident from the fact that it continues to dominate over 60% of the market. While that is one part of the chocolate story, what has relatively gone unnoticed is the rapid progress of two other multinational players.

What was a two-pronged race, now, has Ferrero and Mars in the fray. Mondelēz has hardly been able to counter Ferrero in the segments it has captured. Kinder Joy, a chocolate with a toy, is fast relegating Gems, once a ubiquitous choice for kids. Kinder Joy is now a Rs.550 crore business. Mars, yet another strong player in chocolate bars, is slowly finding traction with Snickers. Not just that, Ferrero has even captured the gifting market with its golden-foil wrapped chocolate offering, Ferrero Rocher. 

These very segments are also the ones that are growing rapidly and, hence, it’s imperative for Mondelēz to create a greater aspiration around its brands. It is trying to fight back with Silk, a premium chocolate, and Bubbly, an aerated offering. To know what Ferrero and Mondelēz are doing to ensure top-of-the-mind recall in this impulse category, go to this issue’s cover story. Given its parent’s deep pockets, Mondelēz recently made a play for Hershey’s, but that pursuit has been put off for now. Even if that bid would have been successful, whether it would have helped gain market share in India is debatable.

Among other stories, there is a feature on how Airbnb is trying to establish itself in the local market. Amid competitors trying to copy its business model, it has its task cut out. Then, where there is broad confusion about an earnings recovery in the next quarter, one particular sector is the new rage in town. Read City Pipers for why investors are flocking to city gas stocks.