New Delhi: Sending a box of imported Ferrero Rocher chocolates along with a wedding invitation or birth announcement has become a popular ritual among the country’s elite. Now, the maker of the hazelnut-centre candies wrapped in gold foil plans to manufacture them closer to this growing customer base.
Ferrero International, the world’s fourth-largest confectionery company with an annual turnover of €6.1 billion (Rs34, 770 crore), plans to invest Rs6 crore over two years to import, repackage and manufacture chocolates and other confectionery items to cater to the Indian market, according to government filings.
In a phone interview from Luxembourg, Ferrero head Antonio Fassinotti refused to discuss the company’s broader plans, citing company policy that prevents him from announcing a “group decision”.
But he did tell Mint, “We are interested in getting to know the Indian market better. India is a country you cannot be absent from.”
The company, which also owns brands such as Nutella, Mon Cheri and Rafaello, presented investment plans before the secretariat for industrial assistance in the commerce ministry last week. Ferrero has already incorporated a new company called Imsofer Manufacturing India Pvt. Ltd, a wholly-owned subsidiary of Ferrero International. It is registered in Delhi and Haryana.
The shareholding structure is proposed to be 9,999 equity shares to Ferrero International and one equity “to a top manager of the Ferrero Group,” according to the filing.
Imsofer will buy land to build a manufacturing unit and import machinery to produce the chocolates. People with knowledge of Ferrero’s plans say the company is scouting for land in Uttaranchal, among other places.
Later, it plans to build production capacity to make other popular brands such as Kinder Joy, a hollow egg-shaped chocolate with tiny toys inside, and Tic Tacs, breath-freshening mints.
In India, most of the materials in making confectioneries will be sourced locally.
Last year, the company reported 10% growth in sales. The company was founded in 1948 by Pietro Ferrero, an Italian inventor of a creamy concoction of hazelnuts and cocoa. Since then, the company has grown into an international brand with 12 plants and 18,000 workers across five continents.
The proposal, undersigned by Fassinoti, said: “The Ferrero Group has a long-term vision for India and is focused on providing complete, nutritious and dedicated products and services to its customers.”
Ferrero International has appointed Delhi-based law firm Titus & Co as consultants for its entry.
With chocolates replacing, if not being served alongside, Indian sweets, the chocolate industry in the country has boomed into a Rs4,500 crore entity. With premium chocolates distributed during festivals such as Diwali and newly- celebrated occasions such as Valentine’s Day, chocolate sales have doubled this year, according to Vinay Malhotra, who markets a confectionery brand called Choco Swiss.
In India, Ferrero Rocher has been distributed by various importers, who brought the chocolates from Singapore and Malaysia. After seeing sales grow with no marketing efforts, the company set up a marketing office in Bangalore four years ago and has a staff of six.
Among India’s growing middle class, the signature box of luxury chocolates has come to be seen as part-gift, part-status symbol.
Recently, Sahara Group head Subroto Roy sent hundreds of pink boxes containing Ferrero Rocher chocolates to friends and relatives to celebrate the first birthday of his granddaughter, Saranya.
“In small bursts, there is a market for premium chocolates and there are already gourmet supermarkets catering to discerning customers,” said Pavas Bhatia, principal consultant with Gurgaon-based consulting firm, Technopak. “There will be a rapid growth in this segment as the retail sector grows.”