The couverture chocolate brand Choko La is poised to make significant strides in its growth strategy. With 7 boutique stores and 15 cloud kitchens already under its belt, Choko La is now setting its sights on expanding its presence in both the Indian and international markets, as shared by Vibhu Mahajan, the company’s COO.
Driven by a rising demand, the brand has set its sights on elevating the number of cloud kitchens to 25 by the conclusion of this fiscal year.
“For our products, we have a huge demand coming in from cities like Mumbai, Hyderabad, Bangalore, and Chennai and to cater to this increasing demand, we are planning to open more cloud kitchens during Q4 of FY24,” he explained.
“Another reason for expanding the cloud kitchens is that demand for our cakes has grown by almost 4x in the last couple of years and we are foreseeing another 2x-3x by the next fiscal,” he added.
Currently, cakes constitute 35 percent of the brand’s revenue. Over the upcoming 2-3 years, Choko La anticipates a shift where it will vie evenly with chocolates, aiming for a balanced 50:50 revenue distribution between the two.
An investment of INR 5-6 crore will be infused to support the expansion of cloud kitchens for the brand.
Choko La, conceptualized by Vasudha Munjal Dinodia, ventured into the modern trade arena in the previous year. It has currently established its presence across Spencer’s, Modern Bazaar, and Le Marche. Looking forward, the brand is strategizing to expand its reach to encompass 24Seven and Sodhi’s outlets.
In addition to this, the brand can be found in duty-free shops at 13 international terminals, as well as on various online marketplaces including Amazon, Flipkart, and Blinkit, among others.
Currently, the brand’s revenue is comprised of 60 percent from boutique stores, while the remaining 40 percent is generated through various other avenues such as marketplaces, e-commerce, Q-commerce, and exports.
“In the coming fiscal year, we are looking to change this ratio to 40:60 and for the next couple of years, we have no plans to enter general trade,” he said.
With a portfolio encompassing over 100 SKUs, the brand identifies chocolate and chocolate hampers as its most swiftly selling product categories.
Continuing its expansion into the premium FMCG market, the brand has recently unveiled a classic-flavored chocolate drink packaged in a 200 ml can. Additionally, the brand has imminent plans to roll out this product in three additional flavors, including options catering to health-conscious consumers such as sugar-free and vegan variations.
With the strategic intent to reach into tier II and tier III cities more extensively, the brand has set a price point of INR 175 for the drink.
“In this segment, we have invested INR 2-3 crore and by Q1 of FY 25, we will be launching more pocket-friendly options in 4-5 key categories to cater to a wider audience in tier II and tier III cities,” he stated.
At present, the beverages segment constitutes 7 percent of the brand’s total revenue. As the demand for this segment continues to rise, Choko La envisions a potential increase to 15-20 percent of the overall revenue by the upcoming fiscal year.
In the previous year, the brand made its debut in the US market, and in the current year, it successfully entered the UK market.
“We are supplying to these markets through Amazon at the moment. We are also talking to the departmental stores, for example, in the US, we are in discussions with Whole Foods, which is again owned by Amazon, and in the UK, we are talking with Selfridges and Harrods and we hope to close it by Q3,” he said.
Simultaneously, the brand is in the process of preparing for market entry into Singapore and Canada.
Furthermore, Choko La has intentions to expand its presence into the GCC region, Western Europe, and Australasia.
“At present, international markets contribute to 5 per cent of our overall business, and after expanding to all these countries, we expect the contribution to go up to 15 per cent,” he said.
“In the next 3-4 years, we are eyeing a presence in 10-15 more countries.” he added.
In terms of fiscal operating revenue, the brand achieved INR 25 crore, and it anticipates concluding the current fiscal year with a figure of INR 35 crore.