Great Write-Up, its not conventional thinking but somebody needs to say it.

Hi Mohit,

1. Lotus does not sell Cocoa. Cocoa is processed to make something called “crumb”. Crumb is mixed with other ingredients to make chocolate.
2. Amul chocolate is highly compound in nature and that is why they can sell it at throw away prices. Pls do try Amul Dark vs Bournville vs Galaxy Fusions Dark – you will be able to tell the difference. Only Mondelez & Mars sell pure chocolate which is not discreetly called out anywhere because that’s not how they want to market it, instead, they choose to talk about the superiority of experience that the product delivers. Cadbury Silk & Galaxy chocolates are pure chocolates.
3. Amul is not growing faster than dairy milk. Infact Amul is losing share.
4. This is the biggest myth that quality of ingredients are inferior in India – no they are not , like I said cocoa/crumb is sourced from a central location so that can’t be different. What is different is the quantum of chocolate + cocoa liquor + cocoa solids depending on price points. Rs 10 will have different recipe vs Rs 50 so that margin profile can be maintained and companies can unlock penetration at compelling price points . What is different (may not be necessarily inferior) is ofcourse the other ingredients like sugar, veg fat etc which are sourced locally. Mondelez may be procuring sugar from dhampur in India and British sugar in UK so subtle difference in taste can be attributed to this.

Hope this clarifies.

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Well, I feel I could not convey what I wanted to. Anyways, time and the company’s performance will tell. I might be wrong or I might not be.

1.Lotus doesn’t sell Cocoa, Amul has been undercutting the competition’s pricing by a good margin for years now and it can happily continue doing so, its huge.

2.I am assuming you know that ingredients are mentioned in descending order of their weightage in a recipe. It is pretty clear that Amul’s chocolate in the same price range has Cocoa as its first ingredient and that there is no such thing as pure chocolate when it comes to Mondelez. But you do get Pure chocolate in Amul.

3.Okay, Forgetting the articles. I am attaching a price chart of Amul dark chocolate which still sells for 110, the price it was being sold at least a year ago. They are growing much faster than brands like Cadbury’s as mentioned earlier and moreover, lotus is also increasing their client list.

4. I hope you understand that the same dairy milk being sold in India contains lower quality ingredients and probably the lowest cocoa content across the globe so cocoa prices won’t do much to them because there is negligible amount of cocoa when compared to countries like the UK where cocoa contents are much much higher.

Please come to conclusions based on the data.

https://indianexpress.com/article/india/indias-black-chocolate-market-biggest-brand-9092362/

Of 170 GW of demand, what makes you worry about competition? How can Adani, reliance and Tata with a manufacturing capacity of 10 GW each fill this 150GW void? Please enlighten us.