Diwali 2021: Chocolate sales improve, but India Inc isn’t buying enough

While only 10 percent of Amul’s sales are from the corporate segment, the faster pace of growth here will help the company as it projects a growth of 30 to 40 percent in sales volumes, annually.

With businesses and retail stores opening up just in time for the festive season, pan-India, it comes as no surprise that the offline sales of chocolate have hit top gear. This comes as great news for several chocolate brands since the optimum recovery in this segment relies on equal contributions from online and offline sales channels in both the consumer and corporate categories.

However, a few companies say that while these green shoots are encouraging, India Inc still isn’t buying as much chocolate as it used to pre-COVID.

“Corporate (segment) is not at the peak when compared to pre-COVID levels,” says Vimal Sharma, founder and CEO, Smoor. “While offices were open, there was a significant quantity and volume of gifting. This year, even though corporate sections are bouncing back, the focus is still mainly on direct door-to-door deliveries,” he said.

Although premium chocolate brands like Fabelle and Smoor have registered a growth of 40 to 50 percent in sales this season over last year’s gloom, they are reporting only a 50-50 sales ratio from their corporate and consumer segments. For a brand like Smoor, that number was 70-30 in favour of the corporate segment, pre-COVID.

The good news though is that despite the reopening of physical retail stores, online sales at most brands continue to stay steady. “In the pre-gifting period, online sales for us started becoming quite a dominant channel, and was anywhere in strong double digits – somewhere around 40-odd percent plus. This was the sales contribution from all online channels stitched together for us,” said Anuj Rustagi, Chief Operating Officer at ITC Foods, which markets the company’s Fabelle chocolate.

“Even with the bounce-back in offline business, we are seeing that there has not been a drop in online business at all. So, we are maintaining the same revenue.” Sharma added, with offline sales bouncing back, it gives an incremental revenue growth of 30 to 40 percent.

So, what are consumers buying this Diwali, anyway? Dark chocolate is a hands-down favourite with sales accounting for 70 percent of revenues in some brands, while sales of sugar-free, almond-based and milk chocolate are also holding their own.

Chocolate miniatures continue to be a hit, as do tiny candies like Amul’s Choco Poco. In the gifting category, celebration boxes like the ones marketed by Cadbury’s remain a classical hit among consumers. Not surprisingly, white chocolate remains the least preferred product category among Indian consumers.