A Gift For Someone You Love

It was June1, 2004; a rainy Bangalore day when Mr. Stany Lobo, the Depot -In-

Charge, Bangalore of Gujarat Co-operative Milk Marketing Federation Limited was looking at the sales trend of Amul chocolates over the last few years and was alarmed to find what he feared most. The trend showed a steady decline which he had anticipated from the sales figures of the last few months. He was reading the sales report given by Mr. M. S. Kumaar, Asstt. Manager (Sales), for the third time. Mr. Kumaar is the officer in-charge of chocolate sales at GCMMF, Bangalore. He was wondering “The meeting with corporate head-office was scheduled in two weeks and I ha ve to give an explanation about the declining sales of chocolates there. I have so less time left and I have to show the results fast.” Mr. Lobo was worried because the HO will demand sufficient reasons and explanation for sales dip even after implementing recently developed corporate strategy to give emphasis on the product.

The Company

Gujarat Cooperative Milk Marketing Federation (GCMMF) is India’s largest food

product marketing organization. It is a Rs. 2882 Cr. milk co -operative organization with a comprehensive national distribution network. It is a state level apex body of milk cooperatives in Gujarat, which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products, which are good value for money. The co-operative produces and markets a variety of dairy and dairy based products like butter, cheese, milk powder, chocolates and ice cream under the brand names of Amul and Sagar. GCMMF operates an efficient distribution infrast ructure, consisting of 46 sales-offices & catering to 3,000 distributors & five lakhs retailers.

GCMMF Ltd. faces an extremely competitive environment. The greatest strengths of this co-operative are the co-operative culture, co-operative networking, market acumen and respect for both producer and the consumer. The co-operative was first launched in 1946. It has grown to touch sales figures of over 25000 tones / year by the end of the millennium and a turnover of Rs.25 billion by year 2002.

Some of the major products under the Amul brand are Amul Butter, Amul Milk

Powder, Amul Ghee, Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Nutramul, Amul Milk, Amul Ice cream and Amulya. These products are a symbol of high quality, cheaper price, excellent distribution network, vast co-operative network of GCMMF, indigenous technology and a proven model for dairy development. The products are categorized under the heads of bread spreads, powder milk, fresh milk, cheese, cooking products, desserts and health drinks.

GCMMF is also the leading exporter of dairy products in India and has achieved Rs 500 million in export turnover by volumes in 2003 -041. GCMMF embarks on total quality management to keep its product of highest quality and has evolved itself by being IT savvy to maintain competitive advantage. It conducts cooperative

development programs to strengthen the business of its cooperative societies.

The operations of GCMMF at Bangalore occur at the depot level and handle the

Bangalore city together with upcountry distrib utors in Udupi and Mangalore. The

Bangalore Depot falls under the regional office situated at Chennai. Bangalore depot caters to 10 main distributors, 4 exclusive ice cream distributors and 6 up country distributors.

The Industry The Indian confectionery market is segmented into sugar -boiled confectionery, chocolates, mints and chewing gums. Chocolates make up a 22,500 -tonne market, which is valued at Rs 400 crores or about 14% and dominated mainly by listed players Cadbury India and Nestle India. Cadbury has a nationwide market share of about 72 % whereas Nestle has about 24 %. The annual per capita consumption of chocolates is around 310g.

The penetration of chocolates in India is only in the region of 23-25 % of the

urban population and only 5% of total Indian households. At present India has about 600 lakhs chocolate consumers out of an urban middle class population of about 2800 lakhs and Bangalore with a population of around 60 lakhs has about 12 lakhs chocolates consumers. The Bangalore chocolate market is headed by the multinational brand of Cadburys followed by Nestle with Amul a distant third. Cadburys has a market share of about 80% in Bangalore while Nestle holds about 12 -13%. The market share of Amul is around 6% & the rest account for 1%.

The chocolates market in India grows at a rate between 10 -20% over the years.

The growth rate in last five years has been around 14 -15% and this rate is expected to continue for the coming few years. The chocolates market is part of the FMCG industry which is also a cyclical business. The Demand growth in this industry swings with the economy and it follows economic cycles with a time lag. It is the last to witness a slowdown and the last to revive when economic turnaround happens. The urban In dian middle class market has tremendous scope in terms of adding consumers and increasing the sales targets of companies as the market is vastly untapped. This is the main reason apart from logistics and storage that the leading chocolates manufacturers are not focusing on the rural Indian market.Chocolates consumption in India is very low and is consumed as indulgence rather than a snack food. The chocolates market experienced a strong surge in volume growth during the 90’s when major chocolate manu facturers repositioned chocolates targeting children as well as adults.

The competitors Cadbury- Cadbury, a subsidiary of Cadbury Schweppes is a dominating player in the Indian chocolate market with strong brands like Dairy Milk, Five Star, Perk, Éclai rs & Gems. Dairy milk is the largest chocolate brand in India. Chocolates & Confectionery contribute to 75% of Cadbury’s turnover. The company's chocolates reach over 650,000 retailers directly and indirectly. The company currently enjoys market share of 70% in India although its share in the pie is decreasing over the years facing tough competition from Nestle and Amul. It has an overwhelming market share of about 80% in the Bangalore market. The company depends on its chocolates subsidiary to drive its performance. The sales of the company have dipped recently after the worms’ episode when worms were alleged to be found in its chocolates. Its competitors who have seen surge in their sales have pounced upon this factor. Cadbury has embarked on a strategy which involves increased consumption of its products through enhanced reach, affordability and visibility, which it feels can be attained by creating new markets, widening the depth of its distribution network and working towards a comprehensive portfolio with brands across all price segments. The company is raising its distribution outlets to 5 lakhs and increasing its product portfolio by reducing price lines and entering other markets.

Nestle- The Company was formed in 1905 after the merge r of Nestle and Anglo-Swiss Milk Company and was called by the combined name. By the early 1900s, the Company was operating factories in the United States, Britain, Germany and Spain. In 1904, Nestlé added chocolate to its range of food products after reac hing an agreement with the Swiss General Chocolate Company. Nestle India Ltd, 51% subsidiary of Nestle SA, is among the leading branded food player in the country. It has a broad based presence in the foods sector and has also increased its presence in the chocolates, confectioneries and other semi processed food products during the last few years. Nestle forayed into chocolates & confectionery in 1990 and has cornered a fourth share of the chocolate market in the country. The category contributes 14% to Nestlé’s turnover. It has expanded its products range to all segments of the market The Kitkat brand is the largest selling chocolate brand in the world. Other brands include Milky Bar, Marbles, Crunch, Nestle Rich Dark, Bar -One, and Munch. . Nestle is focused on product expansion and improvement of distribution efficiency. The Dairy business is being expanded and is expected to drive growth in the long run. At present the company has six manufacturing units in India.

Amul- Gujarat Cooperative Milk Market ing Federation (GCMMF) sells its chocolates under its brand name of Amul. The major brands of Amul are Fruit & Nut and Milk chocolates. Recently the company has launched new brands named Bindass, Fundoo, and Almond Bar as well as festivals chocolates called Rejoice.

Amul chocolates witnessed a surge in its sales after the recent Cadbury worm’s controversy and it has increased its market share slightly. After selling 60 tonnes of chocolate in September 2003, the company was on course to report sales of 1 50 tonnes in October and had projected sales of 250 tonnes in November 2. The increase in its sales is contributed to the launch of its new brands of chocolates as well. Encouraged by the rising numbers, GCMMF has drawn up plans to make its chocolate bus iness a separate division of the company. The company has recently realized that the chocolates business requires special focus and has started to give full attention to it. A detail competitive analysis study done for the above three players in Banga lore is shown in Exhibit 1.

Consumer Behavior

Chocolates are an indulgence product generally consumed by children & youth

but adults also consume chocolates after the position ing change among chocolates

marketers in the 90s. People look after certain key aspects like quality, price, availability, no of varieties, advertisements and promotions in deciding to buy a particular brand of chocolates. Chocolates consumers are gener ally brand loyal though there are a few who try out newer varieties as and when they are launched in the market. People but chocolates irregularly although some people say they buy chocolates at least once a week. A consumer Priya when asked “How frequently you eat chocolates”? had this to say “I eat chocolates every week and all my friends do eat chocolates frequently. Everyone eats chocolates yaar.” People generally buy chocolates at Departmental stores and retail chains and they are ignorant of th e fact that chocolates are present at

Drugstores (Exhibit 2).

People believe Cadbury is the best brand of chocolates followed by Nestle and

Amul (Exhibit 3). People generally buys chocolates for own consumption though a large no of people also buy chocolates for gifting purpose ( Exhibit 4). Amul chocolates are perceived as a natural and nutritious product as compared to its competitors ( Exhibit 5).

Product & Price

Traditionally GCMMF did not give chocolates much importance as a product in

its portfolio as it had a huge basket of products most of which enjoyed large sales and high profits and turnover. Recently the Federation had decided to give special emphasis on this product. Major steps in this direction included revamping the erstwhile packaging of past brands like Fruit & Nut and Milk Chocolates which were implemented throughout India; though its implementation in Bangalore has not been affected yet. A variety of three new brands were also launched in the last 18 months such as Bindass, Fundoo and Almond Bar which had attractive packaging and were available at various price points of Rs 5, Rs 10 and Rs 15.

The decreasing sales of Amul Chocolates had lead to the decision to go for a

market research project to find out the reason for th e declining sales of Amul Chocolates in Bangalore. A management student from a reputed B -school was given this assignment as part of his summer project assignment. Amul enjoys a high level of Brand Name which is one of the main reasons for the sales of Amul chocolates in Bangalore as per the findings from surveying Amul distributors and retailers stocking Amul chocolates.

The packaging of Amul chocolates is very attractive especially after the

introduction of new brands. This fact was emphasized by the findings of the survey

(Exhibit 6. The consumer rating on the most important reason for Amul chocolate sales is shown in Exhibit 7. The prices of the various SKUs of Amul chocolates are shown in Exhibit 8. The billing prices to wholesale dist ributors are shown in above exhibit which gives an idea about the margins to distributors on each pack of chocolates. The retailers get a margin of around 90p per pack for a variant of MRP of Rs 10.

Distribution & Promotion

The distribution of Amul chocolates in Bangalore is done through ten distributors

situate all around Bangalore ( Exhibit 9) The flow of the chocolates starts from Gujarat comes to the C&F agent in Mysore road. Thereafter they are shipped to the respective distributors twice a week (Exhibit 10) who sell them to the retailers and finally to the consumers. The flow of the product is shown in Exhibit 11. Amul chocolates has a shelf life of 6 months but it takes about 4 -5 months for the chocolates to reach the retailers shelf leaving very little time for the consumers to buy.

Every distributor supplies once a week to all retailers in its area. Bigger retailers

like FoodWorld and other chains buys directly from the depot office once a month. Amul chocolates are stocked at all types of retailers like condiments, kirana stores, departmental stores, retail chains, bakeries, drugstores etc. the distributors and retailers say the Cadbury’s and Nestle is a better selling brand sand has better distribution than Amul.

Amul used to give corporate advertisements for Amul chocolates in the past.

Nowadays there are no corporate advertisements as well as local ones in Bangalore. Promotion is only in the form of posters given to salesman and occasional flyers and paintings on shop shutters. Mr. Lobo looking at the project reports wonders if lack of awareness of Amul chocolates is the reason for its decline.

The Dilemma

Mr. Lobo minutely analyzed the sales report and the project report and thought

that “What can be the main reason for the dipping sales of Amul chocolates? How can I arrest the dip and bring back growth in the product category.” The corporate office had set a medium term objective of gaining a market share of 12 -13% in Bangalore within 2- 3 years. He had a strong feeling that the right steps taken will tap the vast potential of sales in Bangalore and will help in attaining the corporate objective. Glancing at the report and its analysis; he wondered what to say at the coming corporate meeting.

Exhibit 1: Competitive Analysis of Bangalore chocolate players

Parameters Amul Cadbury Nestle

Distributor Margin 3.5% 6% 5.5%

Retailer Margin 7.5-9% 15% 13-14%

Supermarket Margin 10-12% 20% 18%

Variety 6-8 10-12 18-20

Price Range Rs 5- Rs15 Rs 5- Rs 40 Rs 5- Rs. 25

Availability Less no of outlets Highest no of outlets Moderate

Advertisement Nil Extensive Moderate

Merchandising No Yes Yes

Support

Display Charges Nil Rs. 6000 p.m. Rs. 2000 p.m.

Local Promotion Very Little Extensive Moderate

Exhibit 2: Place of purchase of chocolates in Bangalore among a sample of 120

Exhibit 3: Consumer Ranking of various brands of chocolates (Sample 120)

Exhibit 4: Reason for purchase of chocolates

Exhibit 5: Factor Analysis output of various brands on two factors (Rating 1 -5)

Factor 1 Variables: Availability, Taste, Quality, Style/Fun, Stimulation & Price

Factor 2 Variables: Natural, Nutrition & Calorie Consciousness

Fact 1 Fact 2

Amul 3.266976 2.859973

Cadbury 3.920072 2.90735

Nestle 3.509295 2.681458

Exhibit 6: Packaging and Promotion rating by consumers

Packaging & Promotion Rating

60

50

40

Count 30 29

20 18 16

10 5

0

Poor Fair

56

3536 38

Packaging

Promotion

6

1

Average Good Excellent

Rating

Exhibit 7: Performance factors rating by consumers for Amul chocolate sales

No Response

Rank 6

Rank 5

Rank 4

Rank 3

Rank 2

Rank 1

0 20 40 60 80 100 120 140

Superior Quality Indian Product Brand Name

Attractive Packaging Better Availability Other Reasons

Exhibit 8: Price Lists & Calculations

Price List for Dairy Prod w.e.f. Dt: 15.5.2004

PRODUCT & PACKING SALES PRICE/CS

WD BillingIncl Tax/

Bef Tax to WD

Amul Chocolates

18x40x15 gm FundooMilk Choc 2603.50 3082.55

24x20x18 gm MILK 1769.02 2094.53

24x10x35 gm MILK 1768.43 2093.82

18x20x35 gm MILK 2652.64 3140.73

24x10x35 gm Fruit & Nut 2697.68 3194.05

18x20x35 gm Fruit & Nut 4046.51 4791.07

18x20x30 gm Fundoo Milk 2629.35 3113.15

18x20x30 gm Bindas Blended 2629.35 3113.15

4x80x35 gm Badam Bar PJ 2371.76 2808.16

18x20x35 gm Badam Bar 2667.19 3157.96

16x20x35 gm Almond Bar 2367.14 2802.70

10x32x(35/40gm.) Choc Tray 2352.23 2785.04

Amul Chocolates

9x30x35 gm Dispenser pack 1989.48 2355.55

10x30x35 gm Tray Pack 2210.53 2617.27

Amul Rejoice Chocolates

60x160 gm Coffee CBX 2483.06 2939.94

60x160 gm Mint CBX 2483.06 2939.94

60x160 gm Almond CBX 2483.06 2939.94

24x306gm Assorted CBX 1753.11 2075.68

12x612gm Assorted CBX 1753.11 2075.68

16x441gm Assorted CBX 1753.53 2076.18

Amul Nuts 'Bout U Chocolate

24x5x70 gm (Orange/Brown) 3661.57 4335.30

Amul Choclairs /Milklairs

6x2.2 kg. JAR Choclairs 1732.40 2051.16

30x550gm Pouch Choclairs 1504.64 1781.50

6x2.2 kg. JAR Milklairs 1732.40 2051.16

30x550gm Pouch Milklairs 1504.64 1781.50

Amul Chef's Cooking Chocolate

24x500 gm Premium Pack 1979.02 2343.16

24x500 gm Classic Pack 1789.21 2118.43

Rtlr/Prc Local Incl Tax Bef Tax

Incl of MRP / KST + WD/pr/pk WD/pr/

RST C/S Pack (Cess 15%) For PCF Unit

3240.00 5.00 16.00 4.28 3.62

2196.10 5.00 16.00 4.36 3.69

2195.57 10.00 16.00 8.72 7.37

3293.35 10.00 16.00 8.72 11.05

3333.62 15.00 16.00 13.31 11.24

AMUL CHOCOLATE

Amul Chocolates

AMUL CHOCOLATE is made from Sugar, Cocoa Butter, Milk Solids, Chocolate mass

Composition:

Milk Fat 2% Sugar 55% Total Fat 32.33% (Milk Fat + Cocoa Fat) Cocoa Solids 7.5% Milk Solids 20%

Product Specification:

Gujarat Cooperative Milk Marketing Federation

GCMMF: An Overview

Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food products marketing organisation. It is a state level apex body of milk cooperatives

in Gujarat which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products which are good value for money.

CRISIL, India's leading Ratings, Research, Risk and Policy Advisory company, has assigned its highest ratings of "AAA/Stable/P1+" to the various bank facilities of GCMMF.

Members: 13 District Cooperative Milk Producers' Unions

No. of Producer Members: 3.03 million

No. of Village Societies: 15,712

Total Milk handling capacity: 13.67 million litres per day

Milk collection (Total - 2010-11):

3.45 billion litres

Milk collection (Daily Average 2010-11):

9.2 million litres

Milk Drying Capacity: 647 Mts. per day

Cattlefeed manufacturing Capacity:

3690  Mts per day

Sales Turnover (2010-11) Rs. 9774 Crores (US $ 2.2 billion)

Sales Turnover Rs (million) US $ (in million)

1994-95 11140 355

1995-96 13790 400

1996-97 15540 450

1997-98 18840 455

1998-99 22192 493

1999-00 22185 493

2000-01 22588 500

2001-02 23365 500

2002-03 27457 575

2003-04 28941 616

2004-05 29225 672

2005-06 37736 850

2006-07 42778 1050

2007-08 52554 1325

2008-09 67113 1504

2009-10 80053 1700

2010-11 97742 2172

List of Products Marketed:

Breadspreads:

Amul Butter Amul Lite Low Fat Breadspread Amul Cooking Butter

Cheese Range:

Amul Pasteurized Processed Cheddar Cheese Amul Processed Cheese Spread Amul Pizza (Mozarella) Cheese Amul Shredded Pizza Cheese Amul Emmental Cheese Amul Gouda Cheese Amul Malai Paneer (cottage cheese) Utterly Delicious Pizza

Mithaee Range (Ethnic sweets):

Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom) Amul Amrakhand Amul Mithaee Gulabjamuns Amul Mithaee Gulabjamun Mix Amul Mithaee Kulfi Mix Avsar Ladoos

UHT Milk Range:

Amul Shakti 3% fat Milk Amul Taaza 1.5% fat Milk Amul Gold 4.5% fat Milk Amul Lite Slim-n-Trim Milk 0% fat milk Amul Shakti Toned Milk Amul Fresh Cream Amul Snowcap Softy Mix

Pure Ghee:

Amul Pure Ghee Sagar Pure Ghee Amul Cow Ghee

Infant Milk Range:

Amul Infant Milk Formula 1 (0-6 months) Amul Infant Milk Formula 2 ( 6 months above) Amulspray Infant Milk Food

Milk Powders:

Amul Full Cream Milk Powder Amulya Dairy Whitener Sagar Skimmed Milk Powder Sagar Tea and Coffee Whitener

Sweetened Condensed Milk:

Amul Mithaimate Sweetened Condensed Milk

Fresh Milk:

Amul Taaza Toned Milk 3% fat Amul Gold Full Cream Milk 6% fat Amul Shakti Standardised Milk 4.5% fat Amul Slim & Trim Double Toned Milk 1.5% fat Amul Saathi Skimmed Milk 0% fat Amul Cow Milk

Curd Products:

Amul Flaavyo Yoghurt Amul Masti Dahi (fresh curd) Amul Masti Spiced Butter Milk Amul Lassee

Amul Icecreams:

Royal Treat Range (Butterscotch, Rajbhog, Malai Kulfi) Nut-o-Mania Range (Kaju Draksh, Kesar Pista Royale, Fruit Bonanza,

Roasted Almond) Nature's Treat (Alphanso Mango, Fresh Litchi, Shahi Anjir, Fresh

Strawberry, Black Currant, Santra Mantra, Fresh Pineapple) Sundae Range (Mango, Black Currant, Sundae Magic, Double Sundae) Assorted Treat (Chocobar, Dollies, Frostik, Ice Candies, Tricone,

Chococrunch, Megabite, Cassatta) Utterly Delicious (Vanila, Strawberry, Chocolate, Chocochips, Cake Magic)

Chocolate & Confectionery:

Amul Milk Chocolate Amul Fruit & Nut Chocolate

Brown Beverage:

Nutramul Malted Milk Food

Milk Drink:

Amul Kool Flavoured Milk (Mango, Strawberry, Saffron, Cardamom, Rose, Chocolate)

Amul Kool Cafe Amul Kool Koko Amul Kool Millk Shaake (Mango, Strawberry, Badam, Banana)

The confectionery industry in India is the largest among the food processing industries. Indian confectionary market is divided into three segments - chocolate confectionery, sugar confectionery and gums

CASE STUDY

Nestle- The Company was formed in 1905 after the merge r of Nestle and Anglo-SwissMilk Company and was called by the combined name.

Nestle India Ltd, 51% subsidiary of Nestle SA, is among the leadingbranded food player in the country. It has a broad based presence in the foods sector and hasalso increased its presence in the chocolates, confectioneries and other semi processed foodproducts during the last few years.

Nestle forayed into chocolates & confectionery in 1990 and has cornered afourth share of the chocolate market in the country. Nestlé’s turnover. It has expanded its products range to all segments of the market TheKitkat brand is the largest selling chocolate brand in the world. Other brands includeMilky Bar, Marbles, Crunch, Nestle Rich Dark, Bar -One, and Munch. At present the company has sixmanufacturing units in India.

02026126575/2026105117 railways pune.

Jayamam:-09766443736

Dubai:- 9860838941

Sachin:- 08390109592

Amul- Gujarat Cooperative Milk Market ing Federation (GCMMF) sells its chocolatesunder its brand name of Amul. The major brands of Amul are Fruit & Nut and Milkchocolates. new brands named Bindass, Fundoo, andAlmond Bar as well as festivals chocolates called Rejoice. Amul chocolates witnessed a surge in its sales after the recent Cadbury worm’scontroversy and it has increased its market share slightly. The increase in its sales iscontributed to the launch of its new brands of chocolates as well.

Consumer BehaviorChocolates are an indulgence product generally consumed by children & youthbut adults also consume chocolates after the position ing change among chocolatesmarketers in the 90s. People look after certain key aspects like quality, price, availability,no of varieties, advertisements and promotions in deciding to buy a particular brand ofchocolates.

People generally buy chocolates at Departmental storesand retail chains and they are ignorant of th e fact that chocolates are present atDrugstores. People believe Cadbury is the best brand of chocolates followed by Nestle andAmul.

Amul chocolates areperceived as a natural and nutritious product as compared to its competitors .

Recently the GCMMF Federation had decided to give special emphasison this product. Major steps in this direction included revamping the erstwhile packa gingof past brands like Fruit & Nut and Milk Chocolates which were implemented throughoutIndia; though its implementation in Bangalore has not been affected yet.

Amul enjoys a high level of Brand Namewhich is one of the main reasons for the sales of Amul chocolates in Bangalore as per thefindings from surveying Amul distributors and retailers stocking Amul chocolates.

Distribution & PromotionThe distribution of Amul chocolates in Bangalore is done through ten distributors.

situate all around Bangalore ( Exhibit 9) The flow of the chocolates starts from Gujaratcomes to the C&F agent in Mysore road.

Every distributor supplies once a week to all retailers in its area. Bigger retailerslike FoodWorld and other chains buys directly from the depot office once a month. Amulchocolates are stocked at all types of retailers like condiments, kirana stores,departmental stores, retail chains, bakeries, drugstores etc. the distributors and retailerssay the Cadbury’s and Nestle is a better selling brand sand has better distribution thanAmul.

Promotion is only in the form of posters given to salesman and occasional flyers andpaintings on shop shutters. Mr. Lobo looking at the project reports wonders if lack ofawareness of Amul chocolates is the reason for its decline.

The corporate office hadset a medium term objective of gaining a market share of 12 -13% in Bangalore within 2-3 years. He had a strong feeling that the right steps taken will tap the vast potential ofsales in Bangalore and will help in attaining the corporate objective. Glancing at thereport and its analysis; he wondered what to say at the coming corporate meeting.

Amul revamps chocolate strategy

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 Amul’s 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 Amul’s 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 Hershey’s 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 newtypes of chocolates.