KUALA LUMPUR: Nestle (Malaysia) Bhd is aiming for a 10% market share of the premium chocolate segment next year, which has been growing faster, surprisingly, than the overall chocolate market.

“The premium [chocolate] segment is growing and it’s very interesting for most market leaders [in the chocolate industry],” Nestle Products Sdn Bhd confectionery executive director Sachin Goel told The Edge Financial Daily recently. He was met after the launch of ‘Rubies’, Nestle Kit Kat’s latest product in the premium chocolate market segment last Wednesday.

“While growth in the whole chocolate category in the last one year has slowed and remained stagnant, the premium segment has continued to grow, at near double digits,” Sachin noted.

Hence, the launch of ‘Rubies’, which represents Kit Kat’s first foray into the premium chocolate segment.

“We are very confident because there is an evolution towards where the premium segment is heading, worldwide. In Malaysia, you have many festive seasons and many occasions for celebration and gifting throughout the year,” he said.

Sachin said Kit Kat, as a well-established brand, is in a strong position to obtain a greater share of the premium chocolate segment, and that now is the “right opportunity and time” to enter the segment.

Presently, the dominant premium chocolate player — worldwide — is Ferrero, which has swallowed about 44% of the market share.

But in terms of the local chocolate market, Malaysia remains a key success market for the Kit Kat brand, where it is currently a market leader with an 18.7% share of the pie.

“We’re the largest market player here. We sell more than 3.5 thousand tonnes of Kit Kat annually in Malaysia, or more than 10 tonnes of Kit Kat a day,” said Sachin, adding that the original Kit Kat is “mainstream” or, in other words, targeted towards the mass market segment.

He opined that despite a tougher economic outlook, consumers will not stop consuming more Kit Kat, as chocolates are usually viewed as a treat or indulgence.

“In the longer context, it (chocolates) is not an area where you will necessarily see a squeeze out happening in the category,” he said.

As for competition posed by local chocolate brands, Sachin said consumers tend not to distinguish between local and international brands, and instead place more emphasis on the attractiveness of the brand.

“What I see in the market today is that [while] there’s been some squeezing [in the overall market], some brands like Kit Kat have been growing in double digits. It has very strong growth in the last few years.

“Some brands are more desired by consumers. As consumers’ income climbs, they begin to seek more premium international brands,” he said.

This article first appeared in The Edge Financial Daily, on December 15, 2014.