As more and more Indians acquire a taste for dark chocolate, it’s domestic brands, not global confectionery giants, who are dominating this fast-growing segment.
Consider this: India’s dark chocolate market more than doubled in size to $86 million from $41 million over the past five years, growing 16 per cent annually, while the dominant milk chocolate segment grew at 11 per cent a year, as per data from market research firm Euromonitor.
However, international chocolate behemoths such as Nestlé, Mondelez, and Hershey’s, which currently lead in the domestic milk chocolate market, play second fiddle to homegrown players such as Amul in the niche but rapidly-expanding dark chocolate segment.
At a market share of 58.3 per cent, the $639-million milk chocolate segment dominates India’s overall chocolate market. Dark chocolates currently have a market share of nearly 8 per cent, but that’s growing.
Yet, international brands such as Nestlé, Mondelez and Hershey’s, who are among the top players in Europe’s $26-billion dark chocolate market, have chosen to continue catering to the milk chocolate market in India as is evident by their limited offerings of dark chocolate and focus on rural penetration with mass-market products.
In contrast, domestic brands such as Amul, ITC’s Fabelle, Chokola and Mason & Co are spearheading innovation in product offerings by experimenting with different ingredients and emphasising on single-origin cocoa sources. Amul, for instance, offers 17 dark chocolate bars in its product portfolio.
These homegrown brands are also tapping into consumer segments that are urban, health conscious, and open to trying unusual flavours through specific marketing and distribution strategies.
Unlike milk chocolate, dark chocolate is generally more expensive and tastes comparatively bitter due to higher cocoa content, ranging from 50 to 90 per cent, which makes it an acquired taste for most consumers.
Global players focus elsewhere
Nestlé India does not have a dark chocolate bar in its product portfolio and its presence in the segment is limited to dark chocolate-coated wafer Kit Kat Dark. While Hershey’s has a few offerings, Mondelez’s Cadbury has only five dark chocolate bars.
Nestlé’s limited presence in the Indian dark chocolate market appears consistent with its strategy to boost growth by increasing penetration in the highly price-sensitive rural market, instead of focusing on premium offerings. This rural penetration-led growth strategy leaves little room for pricier products like dark chocolate bars. Nestlé’s Kit Kat Dark costs Rs 120 for 41.5 gm, which is much higher than the price of the average milk chocolate bar in the Indian market.
Much like Nestlé, Hershey’s only offers a single dark chocolate bar product in India called BARS Dark with 49 per cent cocoa content at Rs 60 for 40 gm. Hershey’s also has a range of bite-sized filled chocolate called Exotic Dark, which is essentially fruits and nuts covered by a layer of flavoured dark chocolate.
While Mondelez’s Cadbury has five options in dark chocolate bars as part of its Bournville range, it does not disclose the cocoa content in any of them, except for its Rich Cocoa bar with 70 per cent cocoa content.
Chocolate bar market share in India
Homegrown players bet on dark chocolate
At the other end of the spectrum, Gujarat-based cooperative Amul offers 17 different types of dark chocolate bars differentiated by cocoa content, flavour, and origin of cocoa beans. Amul’s Classic dark chocolate range has four variants depending on cocoa content ranging from 55 per cent to 99 per cent.
Amul’s dark chocolate bars are also comparable to popular milk chocolate bars in terms of pricing. For example, its dark chocolate bar with 99 per cent cocoa content costs Rs 1.28 per gram whereas Cadbury’s popular milk chocolate product, Dairy Milk Silk, costs Rs 1.33 per gram. Amul also has dark chocolate bars in five flavours, including orange and mocha, alongside eight variants of single-origin dark chocolate bars with cocoa beans sourced from countries such as Venezuela, Columbia, Ivory Coast, and Madagascar.
“We entered this market with a slab of 150 gm for Rs 100, with elegant packaging and zero marketing, only using the power of social media. Today, we are the largest manufacturers of dark chocolates in the country,” Jayen Mehta, managing director of Amul’s parent company Gujarat Cooperative Milk Marketing Federation, said at The Indian Express Idea Exchange held in November.
Amul is marketing its dark chocolate portfolio in premium packaging at affordable prices across multiple distribution channels, with its products available at kirana stores across 200 towns and in more exclusive spaces such as airport lounges.
According to an Amul executive, the cooperative is tapping into “adults who are interested in maintaining a balanced diet, fitness enthusiasts and athletes who seek energy and antioxidants, individuals with specific dietary restrictions such as those following low-sugar or keto diets, and people with a preference for rich, complex flavours” as its target segments.
On the packaging, Amul explicitly declares its dark chocolates are a “natural source of antioxidants”. For its single-origin range, Amul also displays the taste profile for each cocoa bean source on the packaging. The taste profile includes 12 parameters including caramel, spices, acidity, bitterness, and astringency rated on a scale of one to five.
Pondicherry-based Mason & Co, which has been making dark chocolates for the past decade, is tapping into educated, working, urban, and dual income individuals as its target segment. “Dark chocolate marketing requires a lot of education in its strategy as it tastes different. People need to understand why it tastes different, why it costs what it costs, and how to truly savour and relish it. We believe there is a larger scope for dark chocolate in India, especially since most of the population is diabetic. Dark chocolate contains much less sugar and is preferable to milk chocolate,” said Mansi Reddy, a marketing executive at Mason & Co.
The company currently has 14 different kinds of dark chocolate bars, with the cocoa content varying between 49 per cent and 85 per cent. Mason & Co also claims to be organic and plant-based, with all its cocoa beans sourced from plantations in South India. It currently sells through e-commerce channels and in upscale cafes.
Similarly, Chokola, owned by a third-generation entrepreneur from the Hero Group’s Munjal family, has six dark chocolate bars in its portfolio with cocoa content ranging from 54 per cent to 75 per cent with flavours such as Kashmiri Kahwa, Nutty Hazelnut, and Signature Noir. Chokola has stores across airports and in commercial spaces such as New Delhi’s Khan Market.
ITC’s Fabelle also has multiple dark chocolate bar offerings, including bars with varying concentrations of cocoa beans sourced from Ghana. But compared to Amul, brands such as Mason & Co, Chokola, and Fabelle offer dark chocolates at a much higher price, ranging from Rs 2.25 to Rs 5.6 per gram.