You are on page 1of 3

Amul revamps chocolate strategy Ruchita Saxena & Pallavi Jha / Mumbai September 11, 2007 Dairy major

Amul is reworking its strategy in the chocolate category to push its chocolate product sales. Although, the company has maintained a chocolate portfolio for more than 20 years, the dairy products major never posed a threat to market leaders such as Cadbury and Nestle. Now, with a new product portfolio, the home-grown foods giant is planning to create a space for itself. In the chocolate business, our strategy is to identify the market gaps and try and fill them. We have done this in the past with our sugar free and Choco Zoo, both of which have been appreciated by the consumers. We are concentrating on the niche segment as far as the chocolate range is concerned, says R S Sodhi, general manager, marketing, Amul. Company executives say that by occupying niche spots such as the shape-based chocolates segment, Amul can dominate the segment. In the overall category, Amul has a market share of roughly 10 per cent compared with 70 per cent share of the market leader, Cadbury. The growth in Amuls chocolate sales has remained stagnant over the years. Industry experts say that since the company is present in more than one category, some of its categories have performed better than others. In Amuls case, the bulk of its sales comes from its dairy products such as milk packets. The company is trying to push its chocolate sales through its extensive dairy distribution network, say sources. It is giving discount offers for its recently launched sugar-free chocolates, which the distributors said was well received by the market. The company has also placed its chocolate products at lesser price points compared with its competitors. Other chocolate brands by Amul include Bindaaz, Fundoo, Almond bar, Milk chocolate and Fruit-n-nut. Yet chocolate has never been a major thrust area for the company. It still remains one of its non-core categories. Its chocolate drinks have received better response than its chocolates, say company executives. The chocolate category in India is also seeing increased activity with MNCs such as Hersheys planning to introduce products from its global stable in India in the coming year. Amul is looking at building a bigger portfolio in this category by introducing new types of chocolates.

Amul to segment chocolate market, take on Cadbury

Purvita Chatterjee MUMBAI, Feb. 17 THE Rs 2,500-crore Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF), or Amul, is getting ready to challenge Cadbury in the moulded chocolate market. The cooperative, which has been lying low for a while with its generic chocolate variants such as Fruit & Nut and Milk, now intends segmenting its chocolates, catering to different agegroups and categories that are likely to consume its brand. Speaking to Business Line, Mr Sanjay K. Panigrahi, General Manager, GCMMF, said, "We intend taking advantage of our already existing cold chain to get more active in the growing market of moulded chocolates and confectionery." Said Mr V. J. Matthai, Assistant General Manager, GCMMF, "Previously, we have been after HLL for ice creams and now we will take on Cadbury with our chocolates." According to industry analysts, Amul has already lost the race for ice creams against Levers and now wants to resurrect its chocolate offerings in a bid to latch on to the segment, which in the recent past has seen a flurry of activity both from Nestle and Cadbury. Having launched an occasion-related sub-brand of Nuts 'bout U on the eve of Valentine's Day and Kite Bite for the kite flying festival in Ahmedabad recently, Amul has decided to segment the market with brands catering to the `impulse' and `teen' segments, as well as having brands catering to different occasions. Recently, Amul Rejoice was launched as a gift brand. An ingredient chocolate brand is also on the cards while its eclairs offering, Milklairs, which was launched last year, has been a learning experience for the co-operative, which is looking at getting into sugar-boiled confectionary as well. Elaborating on Amul's foray into the sugar market, Mr Panigrahi said, "Today, we are also looking at branded sugar and talks are on with sugar federations for collaborations. We might enter into a marketing tie-up with them to leverage their products in the market under our brand." In fact, its future foray into sugar confectionery would be an offshoot of this venture. The chances are that its boiled confectionary is likely to be outsourced and manufactured through third-party manufacturers. With players such as ITC and Parle getting more active in this segment, Amul officials feel it already has its cold chain and distribution network in place to get more products to ride this chain. Presently, Amul reaches out to 5 lakh retail outlets and has 2,600 distributors under its fold. Besides, Amul has also taken the initiative to set up 100 of its own brand retail parlours under `Utterly Delicious', this year, an initiative which will give it a retail edge, compared to its competitors such as HLL and Cadbury. Mr Panigrahi estimates Rs 100 crore in turnover in the next three years through the `Utterly Delicious' parlours. As an extension of this retail initiative, Amul is also test-launching a restaurant chain under the Utterly Delicious brand at Vashi in Navi Mumbai. Entering the restaurant business through its master franchisee partner, Kaira Can, Amul intends opening

more of such eateries in Mumbai soon, which will dish out ready-to-eat stuff like parathas, lassi, buttermilk, sandwiches and pizzas, using ingredients from Amul and also vending the products already available under the Amul franchise like soups, kadhis and other ethnic Indian snacks.