Nestle 4Ps

Premium Rush: Strategy for Premium Chocolate Line

Moneyball

Mandar Korlahalli
Prakhar Bindal
Pranav Yadav
Srikanth B G

Premium Strategy: Organic Chocolates

Consumer Levers

Concept
Sell Organic chocolates
Chocolates will be sold as
tablet chocolates
Green gold packaging

Health
consciousn
ess

Organic Packaged Foods

sales -> INR 1.2 billion
in 2012
CAGR of 12%
Organic chocolates US ->
USD 300 million

Environme
nt
Responsibil
ity

Positioning
Current Market Split

Premiumne
ss
attributed
with
organic
products

Organic Foods in
India

Gifting

Play

Mould

Team Moneyball

Mould category can

be further broken
into two segments
based on emotional
pitch of the two
dominant brands:
indulgence and
aspiration

We introduce a new
pitch: an assurance that
the cocoa used in our
chocolates is the finest
organically grown true
to nature cocoa.
This will appeal to
upwardly mobile
segment that is
increasingly conscious
of consuming organic
2
foods

Brand Execution

Hersheys extended its

foothold in the premium
chocolate sector with the
purchase of Dagoba organic
chocolate company.
This allowed Hershey to
enter the rapidly expanding
Organic chocolate market.

Global Organic
Chocolate Sales in
2013 were $1Bn+.
Category is growing
at 20%+ every year
in US.
Organic Packed
Foods
in India grew
Voice
of the
at 25%+ CAGR over
Consumer
least 3 years.
Offering Organic
Chocolate will help
Nestle tap into the
growing trend towards
the ethical consumerism
and capitalize on
consumer concerns over
the economic and
environmental issues
Team Moneyball
surrounding cocoa

Price:
Rs.1350/Kg.
Packs of Rs. 40
and Rs. 85.
Gifting Pack of
Rs. 375.

This
is
the
NEW
YOU!

Cultur
e

Fun

12.5

Gifting
12.5

12.5

12.5

12.5

Consciousnes
s

12.5

Bonding

Place:
Supermarkets,
Wine Stores,
Archies &
BodyShop, Direct
Sales
People:
Conscious Youth
Promotion:
Advertising, Wine
Tasting Events,

12.5

12.5

Celebratio
n

Security

CAREFUL - SOURCING

Nestl's growth strategy has

been centered on its aim to
reposition itself to become
the worlds leading wellness
and nutrition company.
Organic chocolate fits
perfectly in the portfolio and
also closes the premium gap
in
confectionary.
Competitor
Steps

(ICCO.org)

Stimulation

TARGET
SEGMENTATION

Organic Chocolates are experiencing

dramatic growth as consumers continue to
trade up for indulgent, high quality
products. Richard Lenny, President,
HERSHEYS
Portfolio
Fit
Industry Stats

5Ps
Product:
Organic
Chocolate with
Green Labels.
Origin Country
Highlighted on
Boxes. Rainforest
Certification
mentioned
prominently.
Recyclable
Packaging.

Business Plan - 2020

ORGANIC CHOCOLATE CONSOLIDATED P&L
YEAR
Revenue (Cr.)

2014

INR

Expenses (Cr.)

2015

2016

91

INR

2017

2018

130 INR

186 INR

380 INR

107

INR

213

INR

9 INR

19

INR

COGS

INR

55

INR

R&D Expenses

INR

INR

Marketing Expenses INR

18

INR

24

INR

31

INR

40

INR

77

INR

106

INR

147

INR

272

INR

Total Expenses
Profits (Cr.)

PBT

Taxes

PAT

INR

INR
INR

14

INR

7 INR

INR

INR 1,010

76

INR

24

INR

7 INR
P 4& LINR
PROJECTIONS
10

Revenue

INR

17 INR

39

INR

109

INR

12

INR

33

INR

27 INR

76 INR

2019

Assumptions

2020

INR
544 INR
777 1,112

INR
302 INR
429
610
INR
27 INR
39
56
INR
52 INR
68
88
INR
381 INR
535
753

INR
163 INR
242 358
INR
49 INR
73 107
INR
114 INR 35%170 251

Industry Growth Rate

Oragnic Growth Rate
Price (INR/KG)
Inflation
Initial Mkt. Share

2013 Premium Revenue

2013 Premium Sales
(Million Kg)
2013 Cocoa Cost (Kg)

30%
10%
1,400
10%
5%

12
10
120

PROFITABILITY

30%
25%

INR 810

20%

INR 610

15%

INR 410

10%
5%

INR 210

Operating Margin

0%

INR 10

2014 2015 2016 2017 2018 2019 2020

Team Moneyball

Net Profit Margin