The Dharmpal Satyapal (DS) Group is aggressively diversifying into the premium chocolates category even while strengthening the distribution of its existing confectionery and FMCG business.
The company had made its foray into the luxury chocolate business by partnering with Swiss chocolate brand Läderach.
The move is seen as a shift of revenues from tobacco-led products to confectionery and FMCG items. It plans to make Luvit a Rs 500-crore brand from a turnover of Rs 100 crore now.
The DS Group owns brands such as Rajnigandha, Pulse, Chingles, Rajnigandha Silver Pearls and Maze in the confectionery category, and also Catch brand of spices and cooking paste.
The Group also has luxury retail presence with brands like Le Marche, L’Opera, Uncafe and Les Petits. It has been managing brands such as Tom Ford, Berluti, Brioni and Cucinelli, among others. It also has interest in agri and hospitality.
“FMCG is the biggest business for the Group and contributes to 80% of the group’s turnover. We are one of the leaders in the non-chocolate confectionery category and entry into chocolates is a natural extension,” Rajiv Kumar, vice chairman, DS Group, told FE.
The Group had acquired Good Stuff, which that owns chocolate and confectionery brand LuvIt, for an undisclosed amount in June this year. Good Stuff was earlier owned by Goldman Sachs and Mitsui Ventures.
The move is aimed at dominating the domestic chocolate business and gaining footprint in south.
According to a study by the IMARC Group, the Indian chocolate market reached a value of $2.2 billion in 2021 and is expected to reach $3.8 billion by 2027, exhibiting a CAGR of 9.1%.
“The Indian confectionery market is valued at approx 23,000 crore, of which chocolate as a category dominates with an almost 60% share at 13,800 crore,” he said.
On revenue opportunities from the segment, Kumar said, “We are a new entrant in the chocolate segment. The opportunity is huge and we hope to make LuvIt a Rs 500-crore brand over the next 3- 5 years. It is in the mass-premium segment. On the other hand, Laderach is in the luxury segment and we aim to open 5-7 exclusive stores over the next two years besides making it available through our own e-commerce D2C website Laderach.in.”
The per capita consumption of chocolates in India is far lower than the global standards. On a per capita basis, chocolate consumption in India currently stands at 140 grams and against around 900 grams globally.
The company said it is scaling up its distribution, both online and offline, besides also tapping into the quick commerce segments. The group’s retail presence extends to over 700,000 retail points.
The group is also looking at exports in a big way and will be soon enter the US, Europe, West and Southeast Asia. The group has a revenue of Rs 8,500 crore, with tobacco accounting for a 70% of the total.