Year 12 | 28 January 2020 | email@example.com
Demand for dark chocolate, the fastest growing segment in India's chocolate industry, is expected to drive the industry from 58 billion in 2014 to 122 billion by 2019
The chocolate industry in India has come a long way since the 1990s. Back then, Cadbury’s advertising campaign redefined the concept of chocolates, shifting the focus from 'just for kids' to the 'kid in all of us'. Since then, the per capita consumption of chocolate has almost trebled - from 50gm in 2005 to 120gm in 2013. Today, increasing disposable incomes, a rising trend in gifting chocolates rather than traditional Indian sweets, and surging sales of dark chocolates are all providing a major boost to the industry.
India’s chocolate industry is valued at INR 58 billion (~USD 966 million) in FY2014. It is expected to grow at a CAGR of 16% to reach INR 122 billion (~USD 2,033 million) by 2019. The industry is dominated by Cadbury India (now Mondelez) and Nestle India, accounting for nearly 92% of the market share in FY2014. Mars International and Ferrero India are slowly gaining ground in the domestic market with their new product launches.
Milk chocolate is currently the most popular category in India, contributing to 75% of the total sales of chocolates. Dark chocolate, with only a 9% share of the market, is expected to be the fastest growing segment due to its health benefits and increasing awareness among Indian consumers. Furthermore, preferences of Indian consumers are slowly evolving and getting accustomed to the taste of dark chocolate. Companies like Cadbury and Nestlé have successfully introduced their own dark chocolate brands such as Bournville and Nestlé Dark Chocolate.
According to Tejaswee Shrestha, a senior research analyst at ValueNotes, “An increase in the purchasing power of consumers and exposure to global chocolate brands will drive the premium chocolate market. Manufacturers are now keen to tap the rising affluent urban population and are introducing premium or higher priced products in the market.”
Urban cities account for nearly 80% of the consumption of chocolates. Although distribution in rural India is improving, this segment still remains largely untapped. Poor infrastructure - inadequate transportation and warehousing facilities - is their biggest challenge. Smaller chocolate packets, weighing less than 30gm and priced up to INR 10, is the fastest growing segment in rural areas.
The ValueNotes report, titled Chocolate Industry in India: 2014-2019, takes a look at the industry including the current market size and growth, the drivers and challenges for growth, the competitive landscape, an analysis on the industry for investor attractiveness, and Porter’s 5 Forces. Key market trends discussed indicate the opportunities and challenges for industry players.
by S. C.
30 september 2014, Food & Fun > Business