The multinational will today launch the brand it calls ‘super-premium’ via Amazon in the US, UK, Germany and China.
The Cailler brand, acquired by Nestlé in 1929, has been sold exclusively on the Swiss market since 1819. Nestlé says it is the oldest chocolate brand in Switzerland that still exists today.
Analysts previously said Nestlé needed to up its premium chocolate game. The company had been linked to moves for Swiss rival Lindt and Italian confectioner Ferrero, but it has chosen to leverage an existing brand.
The premium chocolate boom
"The premium of today is going to be the mainstream of tomorrow,” Alessandro Rigoni, business executive manager for Nestlé's chocolate & confectionery division, told ConfectioneryNews during a visit to Cailler’s production site in Broc, Gruyère.
Nestlé’s global chocolate marketing director Anne Marin added: "We don’t have the classical cliché that all the growth will come from developing markets. The premium segment in chocolate is growing everywhere.”
Nestlé says the premium segment currently accounts for 12% of global chocolate sales. However, it expects a compound annual growth rate of 8% for premium chocolate in emerging markets in the coming years and 8.4% in developed markets - faster than mainstream global chocolate, which is forecast to grow 5%.
E-commerce launch
Why not India?
Nestlé says India is a strategic market for confectionery, but it will not launch the Cailler brand there yet. "It could an option, if the supply chain is fixed," said Anne Marin, but she said there it was currently tough to protect the freshness of the brand in India's hot temperatures.
“We’re launching in really select channels and markets,” said Marin.
Nestlé introduced Cailler solely via the e-commerce channel in the US, UK and Germany today and the brand will launch in China on November 15.
“It’s no secret to say that US is a big chocolate market or China. It’s also that the e-commerce capabilities of handling chocolate was there,” said Marin.
"In e-commerce you are capable of targeting the consumers, so the famous in-the-know middle class that we want to target, we wanted to have capabilities to talk to them, which is not something you are necessarily able to do if you are in a classical retail environment,” said Marin, adding that Amazon allowed Nestlé to communicate the brand story with images and videos.
Travel retail
Cailler will have also displays in travel retail at airports in Basel, Dubai and Singapore.
"This is just to have physical touchpoints in a luxury environment," said Rigoni. "But most of the sales are going to be online and the reach we're going to have online will be far bigger than building distribution through retailers. In retailers you are going to be somewhere on shelf and that's not premium"
Like many chocolate brands, the Cailler brand is quite seasonal and the biggest volumes currently come from September to April. In the domestic market 60% of Cailler's pralines are sold during the Christmas period (October to December).
Rigoni said shopping habits in some of Cailler’s new markets could offer more seasonal opportunities. The brand may look for example to capitalize on Chinese New Year and China’s Singles Day on November 11.
The sourcing and ingredients
The Cailler brand uses UTZ Certified cocoa from the Nestlé’s Cocoa Plan. The UTZ logo and Nestlé Cocoa Plan are communicated back of pack. The cocoa butter is derived from a blend of Ivorian, Ghanaian and Ecuadorian cocoa beans.
Nestlé processes its own cocoa for the brand at its factory in Broc and intends to keep production at the plant. It also roasts hazelnuts and almonds at the factory.
Fresh milk is sourced locally from farmers around the factory. "Most of the others would use milk powder and we are the only one taking the milk fresh in liquid form to transform into our chocolate within four days,” said Rigoni.
He claimed the fresh milk helped to produce a creamer taste in Cailler's milk chocolate products. Milk chocolate accounts for roughly 70% of Cailler's volumes.
Nestlé says its Cailler's chocolate uses only '100% pure cocoa butter'. "This is to say we don’t use any palm oil...everything we bring in is cocoa butter and no other vegetable fats," said Rigoni.
Marin said: "If you look at the portfolio of Nestle chocolate, this is one of the brands that has really all the credentials to be recognized as super-premium."