Navigating Through COVID-19 Crisis: The Secret Of Premium Chocolate Industry The pandemic provided a fresh perspective on how companies should go about their businesses in the future

The pandemic has given rise to evolving customers' needs and experiences. This trend has given an opportunity to companies to expand their market share and come up with expensive, premium ranges -- the chocolate industry is no exception to this. Like all other sectors, the COVID-19 had its implication on the industry, however, undettered by the unprecedented crisis companies adopted a fresh perspective on how they should go about their businesses in the future.

"It gave us the opportunity to reimagine the ITC Fabelle brand. Given that boutique services were not accessible during Covid, we commenced home delivery of Fabelle chocolates via food-delivery apps as well as grocery platforms. We discovered a high demand and used these channels to meet it. To further scale up, we are now collaborating with Cloud kitchens to set up Fabelle infrastructure and doubling down on e-commerce to get Fabelle to our consumers," said Anuj Rustagi, chief operating officer, chocolates, coffee and confectionery, foods division, ITC Ltd.

During Covid, Hershey's in-home portfolio– syrup, spreads, cocoa powder, hot chocolate increased rapidly as consumers were experimenting with baking and cooking at home during the lockdown. "While the out of home portfolio was adversely impacted in the first few months, the same bounced back in 2021 and we have clocked category-leading growths (chocolates, milkshake). Thus, at an overall level, we have outpaced FMCG growth, during and post the pandemic," said Geetika Mehta, managing director, Hershey India.

Covid-19 disrupted global supply chains and impacted communities worldwide. The small holder farmers were particularly hard hit. Though the Ferrero India business saw a slowdown during the pandemic, it has seen an overall pick up. "India is a country of festivals and with the festive season ahead, we foresee a high demand, as witnessed year on year. To this effect, we have geared up our production and entire supply chain to meet the demand. Additionally, we have been consistently expanding our distribution network to make Ferrero products available to many more new customers," said Zoher Kapuswala, marketing head, Pralines, Ferrero India.

Offline businesses faced challenges just like other brands, but this also provided an opportunity to explore new ways of reaching out to our customers. "From being 100 per cent offline business to 99 per cnet online, the journey was great and we didn't even know we could reach targets/numbers through digital sales. The pandemic wasn't easy, but when there's a problem, there's an opportunity," said Vimal Sharma, founder-director, Smoor.

Shift in consumer behavior

It is difficult to dismiss the influence the pandemic has had on consumer consumption behavior. Individuals are now more aware of the food they consume and when it comes to impulse purchases such as chocolate, more people have begun to choose dark chocolate, which has a powerhouse of health benefits.

"To meet customer expectations and enliven the senses, Fabelle's master chocolatiers have created a variety of dark chocolate bars, such as the divine dark chocolate bars manufactured from Ghanaian and Colombian cocoa. These chocolatiers have also recently crafted limited edition bittersweet treats using single origin cocoa from major global cocoa-producing areas like Ghana, Madagascar, Colombia, Dominican Republic, Ecuador, Sao Tome & Principe, Ivory Coast and Venezuela," said Anuj Rustagi, of ITC.

The eating habits of urban Indians have evolved post pandemic and the trend of snackification has accentuated and is here to stay. While Indian palette leans towards indulgence, there is increasing orientation towards better-for-you and permissible snacking.

Hershey crafts products that work for every occasion — from indulgent treats for special moments to energy-boosting options that support an active lifestyle."We use quality ingredients and leading manufacturing standards, with relevant benefits, which build distinction and preference for our range of products," said Mehta.

As consumer tastes have changed, Hershey India is focusing more on innovating its core brands through low or no-sugar and bite-size offerings in an effort to meet these needs. The better-for-you portfolio by Hershey India offers products including Sofit- Plant-based Soy & Almond drinks, Hershey's Kisses with 30 per cent less sugar variants, Hershey's Exotic Dark and Hershey's 49 per cent Dark Bar.

"Consumers prefer to incorporate ingredients that improve their health into their normal diet. Dark chocolate is becoming more popular among consumers due to its high cocoa content and flavonoids known as flavanols that are linked to a lower risk of heart disease. Additionally, the studies show that consumers who consume dark chocolate or high cocoa content have a lower chance of developing insulin resistance and high blood pressure. Thus, the health benefits associated with cocoa and its products are the biggest driver for the cocoa and chocolate market," said Rajat Wahi, partner, Deloitte India.

Retaining uniqueness

For any brand, taste, quality and freshness of products are always a topmost priority. "Our key divisions in innovation and customer shopper understanding pay close attention to customer requirements and this has led to the creation of unique products that are today part of the vast Ferrero product portfolio. Special attention is given to raw material procurement which has ingredients of the highest quality," said Kapuswala, marketing head, Pralines, Ferrero India

Ferrero India launched its products at the national level in May 2010 and since then has expanded its portfolio to products that are suited to tropical regions. "The products are designed by our experts in such a way that premium quality is maintained through all aspects, be it taste, quality, freshness packaging, thus ensuring uniformity across geographies," he added.

Companies often have to deal with managing product replicas. There is no doubt that counterfeit commodities negatively impact sales and product standing in the marketplace. "At Ferrero, it is our topmost priority to maintain our products' integrity and brand reputation. Therefore, we make sure that the quality and packaging of our products are top-notch, giving the consumers a very clear distinction between our products and possible replicas. Customers need to look out for mandatory labeling prescribed by the Indian Food Authority - FSSAI to ensure they have the authentic product in hand such as Veg logo and FSSAI license number," said Kapuswala.

Sharing a similar view, Rustagi of ITC added, "Fabelle, is an aspirational brand and our range of chocolate formats are unique which none of the competition brands provide. A lot of our products are handcrafted and created by master chocolatiers. The products and packaging are so exquisite that replicating them is a challenge and hence we are derisked."

Factors such as market reputation, product quality, production methods, brand marketing and last mile can help lessen the impact.