Staff Reporters
Jun 29, 2010

Chocolate: A growing indulgence with Asian consumers

Chocolate outperforms the FMCG sector as consumers savour an affordable luxury, spurred by doctors who say improved cocoa content might be good for health.

Chocolate: A growing indulgence with Asian consumers

Whether as a gift, a snack, or an indulgence, chocolate is hitting the spot with Asian consumers, and is driving growth with increasingly innovative branding at a time when sales of other FMCG products are stuttering.

The apparently recession-proof sector also saw the surprise takeover of Cadbury by US rival Kraft at a time when M&A deals around the world had virtually dried up.

"The recent merger of Kraft and Cadbury will redefine the competitive dynamics of this category," predicts Glen Murphy, head of regional client leadership across Asia-Pacific, the Middle East and Africa at Nielsen.

Indeed, the Asian chocolate industry is buzzing with speculation about Kraft's future branding plansfor Cadbury's products, particularly in China, where its range of candies and Dairy Milk bars have always lagged the Mars-owned market leader, Dove. There is also interest in how the brand will grow in India, where Cadbury commands one third of the market.

Murphy is optimistic about the possibilities for development in China, pointing to volume growth of 2.1 per cent over the year to March. He adds that consumer interest is currently focused on premium products: the premium sector grew by 15.5 per cent over the course of the year.

"There's a real chance to grow the whole chocolate category in China at the moment - not just to take market share," says Heidi Zhang, strategic planning director at Publicis Beijing. "But so far, marketing has been mainly driven by TV campaigns. The ads are functional, revolving around product features and the heritage of the brand. It's not like in the West where campaigns are more about joy, emotions and humour, but that is now starting to change."

Zhang points to the latest Dove TV campaign as evidence. "It features a young girl, pulling her suitcase through town, looking for a hotel. She stops to eat her Dove candy and then finds the place. There is no one idea behind it, but it's soft, feminine and more romantic in mood than we've seen before."

At the other end of the demographic spectrum, brands such as Snickers have focused on China's male youth segment. A recent campaign by Nitro China trumpeted the bar's ability to satisfy hunger and boost energy. The work featured a troupe of Parkour masters scaling buildings and a stylised martial arts fight in a classroom, and is clearly a move away from Snickers' earlier education and product information-led advertisements.

Even though a growing number of campaigns for chocolate brands in China now include a digital element, the vast majority of advertising spend is still targeted at TV audiences.

"The digital space is still largely experimental," Zhang says. "It is mainly being used as an extension of above-the-line advertising space. It has not really gone beyond that, to a space for leading conversation and sharing experiences about brands."

In India, market leader Cadbury has been successfully marketing a series of premium products - Cadbury Dairy Milk Silk and Bournville dark chocolate - the latter a product that is benefiting from medical research indicating that chocolate with higher cocoa content can offer health benefits. Growth of high cocoa dark chocolate in China currently stands at 153 per cent, according to Nielsen.

Looking to build on raised interest levels, Cadbury is aggressively marketing Bournville in India. A year since launching in the market, the company has rolled out two branding campaigns and three campaigns focusing on the brand's assorted products.

The latest TVC takes a humourous approach and reiterates the 'You don't buy a Bournville, you earn it' theme, and features an irate Englishman being carried off by a large bird after failing to earn it.

The campaign for Silk centres on the concept of indulgence.

What the ads for Silk do not reveal is that the change in recipe -in favour of a higher milk-butter content to give the smoother taste-means that these bars can only be sold and stored in an air-conditioned environment. As a result, this particular campaign will only target the country's top 35 cities.

Top 10 chocolate

1 Cadbury
2 Ferrero Rocher
3 Meiji
4 Dove
5 Nestlé
6 Lindt
7 Hershey's
8 Lotte
9 M&M's
10 Godiva

This article was originally published as part of the 2010 Top 1000 Brands report.

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