Profit by chocolate: ITC cooks up plan to turn Fabelle into mass brand

The company looks at ways to take its premium label for chocolates to the market, without diluting the brand

With new formats, a broader range of flavours and using its wide network of retailers ITC is taking its three-year-old private label Fabelle to the mass market. Until recently it retailed exclusively in ITC hotels, was made in small batches with a limited flavours and formats and priced at a premium. Now as Fabelle goes out to a wider set of consumers, does ITC risk diluting its carefully crafted premium-luxury positioning? 

Experts believe that a clear answer will emerge later, but it is important for the brand to differentiate within its offerings and also create a distinct identity for Fabelle, from the rest in the market. Otherwise the risk of the brand losing its core promise and positioning is high.

Fabelle has been expanding its portfolio steadily, adding dark chocolates and blended flavours into the mix. It has, for instance, exotic dark chocolate flavours and premium chocolate bars such as Rocky Road and a limited edition offering labelled Ruby Gianduja in its portfolio. At the same time, it also has regular bars and blended flavours in popular formats and prices. 

Sanjiv Puri, managing director at ITC reasoned that the idea behind expanding Fabelle’s range was to achieve economies of scale and the company now feels that this brand, which was incubated in some of its hotels and two chocolate boutiques in luxury malls, is mature enough to be exposed to the vagaries of the consumer market.

“Now, we have more accessible offerings of a premium-popular nature, which we have taken to a larger number of outlets in Bangalore. It is Fabelle, but in different variants,” he said. Its premium chocolate bars come in two formats and are priced in the range of Rs 65-Rs 160.

Given that its portfolio includes a luxury-premium range and a mid-premium set of offerings, Fabelle finds itself pitted against two different sets of competitors. At the luxury end, it takes on Lindt, Godiva, Guylian and others and in the mass market, Mondelez’s Cadbury, Nestle and Amul.

The challenge will be to keep the brand promise intact across the different markets. “There are certain values which the brand stands for. It is to give you a magical, textured experience which is distinct and differentiated,” Puri said, seeking to dispel notions that the brand may be diluted. 

Harish Bijoor, CEO at Bijoor Consults believes that ITC has taken a leaf out of the playbook of global brands such as Godiva. It first tested Fabelle in a closed and controlled environment with discerning customers to understand if the product had the right appeal. Thereafter, it limited availability to luxury malls. And now, he said, “It is natural for ITC to extend various products at different price points with this brand.” 

“These migrations are risky and a company needs a very clear vision. Otherwise, there may be overlaps in the differentiator,” Ramesh Thomas, president at Equitor said. He further explained that the mass-premium market is driven by prices, variants and packaging, apart from the product quality, but boutiques and the luxury space are driven by experience.

There is another challenge that Fabelle faces. Even though ITC is a known brand, few associate it with Fabelle or even know of the chocolate brand. “Thus, to a common man who hasn’t ever visited a luxury ITC hotel, Fabelle is like any other mass-premium brand. The brand now needs recognition from the mass-premium space,” Sandeep Goyal, founder Mogae Media said. 

Besides, the distribution and availability of the mass-premium bars will be key to Fabelle’s success as it steps outside the controlled environment of its own hotel chains. On that score, brand experts are unanimous, ITC has an advantage over the rest, given its extensive network of retailers across the country.