Sweet Paradox: Why India’s Dairy Giant ‘Amul’ Struggles in the Chocolate Arena
An analysis of Amul, India’s most trusted food brand, missed the chocolate revolution despite vaving the correct ingredients
“Only god knows why Amul chocolates are not everywhere” muttered my friend while unwrapping the chocolate bar, dessert he wanted to indulge in during our post-dinner walk. I had a flurry of thoughts: Amul an established brand, has quality second to none, is trusted across generations — so why is Mondelez so far ahead?
This thought remained at the back of my mind for months, but it suddenly resurfaced during a session on product strategy management. After session, I pulled out my phone and searched ‘Amul’ on LinkedIn and tapped connections tab. To my surprise, one of my juniors happened to work with Amul for 3 years. I dropped a text and had a call immediately after. He gave me the contact of the director of Amul chocolates the next minute.
Before I could talk with the director of Amul chocolates, I had to do some background research which consisted of following items:
1. Product portfolio overview
2. Key success factors
3. Industry overview and trends
4. Competitive analysis
5. Value chain analysis
6. Corporate strategy
7. Solutions
8. Conclusion
This blog is therefore a summary of research work and suggestions I made to the director of Amul Chocolates. Let’s begin!
Product portfolio overview
Amul’s chocolate journey spans over four decades, offering an impressive array of products from dark chocolates to milk variants. Their portfolio showcases their commitment to quality with single-origin chocolates from Venezuela, Colombia, and Madagascar, yet somehow fails to capture the Indian consumer’s imagination.
Key success factors
1. Price Sensitivity: Indian consumers are highly price sensitive. Understanding and addressing this sensitivity through pricing strategies and value offerings are crucial.
2. Health Trends: Growing awareness about health and wellness is changing consumer preferences. Companies are innovating with healthier options, such as dark chocolate and low-sugar variants.
3. Creating associations with Indian culture: Leveraging festivals like Diwali, Rakhshabandhan, New year New year to boost sales through limited edition marketing and special product launches.
4. Good distribution and supply chain: Efficient and sustainable sourcing of cocoa is critical, especially locally along with having a wide distribution network from supermarkets, hypermarkets, and e-commerce platforms to rural areas where connectivity is low is essential to reach a broader audience.
5. Flavour & Packaging Innovations: Introducing new and unique flavors that cater to local tastes while maintaining global standards along with attractive and convenient packaging that enhances shelf life.
Industry overview and trends
The Indian chocolate market is experiencing robust growth, valued at $2.45 billion in 2024 and projected to reach $5.04 billion by 2034, with an impressive CAGR of 8.2%5. Several key trends are shaping the industry:
Premium Segment Growth: There’s an increasing demand for premium and luxury chocolate products, particularly in urban areas.
Dark Chocolate Revolution: Amul has pioneered the dark chocolate segment in India, offering varieties ranging from 55% to 99% cocoa content.
Distribution Evolution: Online retail is emerging as the fastest-growing distribution channel, with a projected CAGR of 9.14% through 2030.
Competitive analysis
Competitors have a diverse and wide range of products various packs and price points. With their extensive distribution competitors reach retailers through visi-coolers, tabletop dispensers which increases the visibility of products.
Mondelez International (Cadbury) dominates with a 51.54% market share. Other major players include Nestlé, Mars, Ferrero, ITC.
Cadbury and Nestle have nailed emotional marketing through their ‘Kuch meetha ho jaye’, ‘Kitkat break banta hai’ and Rakshabhandhan and Valentines Day Ad campaigns.
Consumer perception
I ran multiple qualitative interviews for a wide variety of consumer personas teenagers, young adults, and adults from tier 1, 2 tier 3 cities across various income categories. This research revealed interesting insights listed below:
· Amul chocolates are not easily available in the INR 20 to 40 range packs.
· Amul chocolates are not omnipresent across all retail formats.
· Amul should target fitness enthusiasts with its Dark Chocolates range
· I expect Indian flavours from Amul chocolates: Rasgulla, Gulab Jamun
· Amul choco doesn’t have a good recall for its tagline
· Amul choco doesn’t have a trigger event
· Consumers can’t recall any specific Amul chocolate flavour
· Consumers are unaware that Amul is in chocolates business for 4+ decades.
· There’s a disconnect in branding. Amul sounds is homegrown Indian brand, flavours sound too foreign and are hard to remember (Venezuela, Colombia Classique)
Corporate strategy
What’s working
· High brand value of Amul umbrella brand, known for purity, trust and nutrition
· Strong distribution network riding on the supply chain of Milk and related products
· First mover advantage in Dark chocolates with a market share of 50% plus
· Consumers preference towards flavour, sweetness, texture
What’s not working
· Very low spend on Advertisement and promotions (<1% of sales)
· Lack of adequate capacity to garner a higher market share
· Lacks a distinct a brand recall
· Low availability, poor store layouts, improper shelf placement.
Solutions
Considering pain points and key success factors, I propose following solutions
Product:
· Launch Indian flavours: Rasgulla, Gulab Jamun flavoured chocolates. Goes well with Amul’s brand image.
· ‘Sachetize’ the product i.e. reduces the packet size and make it available in 30-, 60- and 100-gram sizes.
Target:
· Given that Amul has highest market share in dark chocolates, they must target fitness enthusiasts and launch appropriate marketing campaigns.
Branding:
· Associate with moments in daily life: Post/ pre workout snack, Energy boost during treks, Snack time in office
· Increase visibility and brand recall.
· Leverage 4+ decades experience, mention such tagline on the product.
Conclusion
The chocolate saga of Amul represents a unique paradox — a beloved dairy giant that hasn’t yet unlocked its full potential in the chocolate market. With its robust distribution network, trusted brand name, and commitment to quality, Amul stands at a sweet spot of opportunity.
The question isn’t if, but when Amul will write its success story in chocolate — just as it did with milk decades ago.
Thank you for reading this far! In case you want to discuss this topic or anything on brand, product, business, or design let’s catch up on my Twitter.
