CHOCOLATE INDUSTRY IN

INDIA

Team Members:
1)Honey Hingorani 16bsp0994
2)Hormaz Bhesania 16bsp0996
3)Hormaz Kavina 16bsp0997
4)Jagpreet Bhatia 16bsp1029
5)Jagruti Mohapatra 16bsp1032
SIZE OF CHOCOLATE INDUSTRY

The preferences of Consumer in India have gradually transformed from traditional sweets
to the chocolates over the last couple of decades. Moreover targeted promotional
campaigns by chocolate companies over the last decade have encouraged the consumers
to gift chocolates on festive occasions.
The per-capita consumption of chocolates has also increased from 50 gm in 2005 to 300
gm. Currently, Cadbury is the market leader in terms of total chocolate sales, followed by
Nestl. The growing preference for dark chocolates has consequently led to higher
demand for cocoa beans in chocolate manufacturing.
Indias chocolate industry is valued at INR 78.04bn in FY2016, and is expected to
grow at a CAGR of 16% to reach INR 122bn by 2019.
Moreover, The global chocolate market is worth $85 billion annually and the per capita
consumption in developed markets such as United Kingdom is 1.9kg which is much
higher than the percapita consumption of chocolates in India.
The Indian chocolate market has been broadly segmented into Industrial Chocolates,
which are used in preparation of different food products such as bakery items, ice cream,
etc. and Consumer Chocolates (Dark, Milk and White), which are directly sold to the
consumers.
In 2014, Consumer chocolates segment dominated the Indian chocolate market, and this
trend is expected to continue over next five years. Product innovations, strong marketing
strategies and increase in variety of products are driving consumer towards chocolate
sales in India. From last few years, apart from children, adult population has emerged as
the key consumer segment for chocolate companies in the country. The manufacturers
have been launching innovative chocolate products such as sugar-free and organic
chocolates to attract adult consumers. In terms of regional sales, Northern India accounted
for the largest share in 2014, followed by the Southern, Western and Eastern regions of
the country.
The Indian chocolate industry has come a long way. The per capita consumption of
chocolates has grown successfully from 2005 to 2012. Over the years, changes in
consumers preferences and lifestyle, eating habits, and their global exposure to
international brands have given a boost to the chocolate industry.
 The chocolate industry can be segmented by the type of ingredients which is used to
produce the chocolates. This includes dark, milk and white chocolates. As shown in the
above figure. Increasing disposable incomes, is a rising trend in gifting chocolates rather
than traditional Indian sweets, and increasing sales of dark chocolates are all providing a
major boost to the industry.
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. Nowadays, preferences of Indian consumers are slowly moving
towards the taste of dark chocolate. Companies such as Cadbury and Nestl have
successfully introduced their own dark chocolate brands, like Bournville and Nestl Dark
Chocolate. An increase in the purchasing power of consumers and exposure to global
chocolate brands will drive the premium chocolate market.
 Growth of Chocolate Industry
India is one of the fastest growing chocolate markets in the world. A delectable
combination of rising disposable incomes, changing lifestyles and a young populations
growing penchant for indulgence has transformed India into one of the worlds fastest
growing chocolate markets.
Overall, Indias per-capita spending on confectionery is tinyand that means theres
plenty of room for growth.

The chocolate industry has a considerable growth potential in the country but the area of
concern lies in high input cost of raw materials such as sugar, cocoa, milk powder and
increasing packaging cost. Increasing tariffs and rising custom duty also makes the imported
chocolate costly thereby affecting the sales of premium chocolates in the country.
According to a recently published report by TechSci Research, India Chocolate Market
Forecast and Opportunities, 2019, Indias chocolate market is forecast to grow at a CAGR of
16%, in value terms, during 2014-19.
From the year 2007-12, India was among the 5 fastest growing chocolate industry for adult
consumption of chocolates and candies, growing at 270%.
India having tiny per capita spending on confectionary has the largest compound annual
growth rate of chocolate industry.

India chocolate market is divided into four segments where Bars chocolate segment accounts
for maximum share of 36%. However, the demand for assorted chocolates is expected to
increase with the highest growth rate within next five years considering the increasing gifting
culture in the country followed by growing demand for luxury chocolates.
Experts hence believe that factors such as rising cocoa prices and lack of supply-chain
infrastructure in India have not exactly dampened the enthusiasm of chocolate makers and the
growth of the chocolate industry is all set to upwards.
 Market Leader

Cadbury Chocolate

Cadbury was introduced In India, in the year of 1948. Ever since then, there has been no
looking back for the company, accounting with almost 55.5% of chocolate sales annually.
Cadbury includes some of the most successful franchises of chocolates in the market
including, Dairy Milk, 5 star, Gems, Perk, Silk, Bourneville, Celebrations.
It is the market leader in the chocolate confectionery business with a market share of
over 70%
Cadbury India has a share of over 70% in the market, which is the highest Cadbury brand
share globally. Cadbury Indias one of the most popular brands, Cadbury Dairy Milk is a
benchmark for other chocolates in India and is regarded as the gold standard. Some of the
other popular brands are 5 Star, Perk, Bournville, Celebrations, Halls, clairs, Tang and Oreo.
The main brand in the Milk Food drinks segment is Bournvita, which is known as the leading
Malted Food Drink (MFD) in the country. In the medicated category, Halls is a favorite candy
while Cadbury India has also entered the biscuits category by launching Worlds no.1 biscuit
brand Oreo. Cadbury has also been the leaders in the development of cocoa cultivation in
India since 1965. The research work has been carried out in collaboration with the Kerala
Agricultural University. The team from Cadbury also conducts training sessions for the cocoa
farmers on cultivation aspects to have an increased cocoa productivity.
 Market Challenger

Nestle India
Nestle India has been aggressively challenging Mondelez Cadbury products from the year
2006 onwards. In the year 2006 Nestle brought out its premium products in the market and
gained an impressive 26% market share.
However in recent times, Nestle India has been facing tough competition and has been losing
its market share. Its current market share is 14% with revenue of 1100 crores.
The Nestle India CEO Suresh Narayan said it is still at a nascent stage in India in terms of
penetration, was witnessing a very healthy growth in the last few years but it saw a bit of a
slowdown in 2015 for all the brands. We believe the category will bounce back soon.

Market Follower

Amul

Amul has been in the confectionary business and has maintained a chocolate portfolio for
more than 20 years but the dairy products major never posed a threat to market leaders such
as Cadbury and Nestle.
In the overall category, Amul has a market share of roughly 10 per cent compared with 70 per
cent share of the market leader, Cadbury.
The growth in Amul's chocolate sales has remained stagnant over the years. Industry experts
say that since the company is present in more than one category, some of its categories have
performed better than others.
The company has also placed its chocolate products at lesser price points compared with its
competitors. Other chocolate brands by Amul include Bindaaz, Fundoo, Almond bar, Milk
chocolate and Fruit-n-nut.

Market Niche Players

Ferrero
Italys Ferrero Spamakers of the popular Kinder Joy chocolates, Nutella chocolate spread,
Ferrero Rocher chocolates and Tic Tac mintshas seen its revenue shoot up in India.
In 2015, the companys sales in India rose 76% to Rs1,014 crore ($160 million) and it posted
its first-ever profit of Rs12 lakh ($18,931).
Ferrero is currently having 6% market share in the entire chocolate industry
Mars International
Mars International India, a subsidiary of the American Mars Inc, has invested Rs1,005 crore
($159 million) in a new factory in Pune in Maharashtra. The plant makes brands like Snickers
and Galaxy. The experts feel that demand for both Snickers and Galaxy is rising amongst the
youngsters and that it has created a different segment amongst it.
 Marketing Strategies

1) Cadbury India

Revenue of the company grows with the emerging markets. Cadbury

continuously modify the products to fulfill the requirement of all segments of
consumers. This strategy leads them to a growth of above 20% annually for
the past three years.
To attract the broader range of consumers is the main target the Cadbury.
They created a base range of their acceptable chocolate brands at more
reasonable and affordable price. They also introduced the gift range products
for the customers segments with high-income group.
Cadbury has increased their presence in the candy in the form of halls and
Cadbury dairy milk Eclairs. Eclairs became more popular in the markets with
a hotter climate. The consumers find the delicious taste of chocolate in the
middle that easily melts in the mouth and not in the hot climate. It is also an
affordable chocolate for everyone. The new Eclairs Crunch is with more
crispy caramel shell for hot climatic conditions.

2) Nestle India

In order to price its premium products cheaper, Nestle India introduced a

new variant of KitKat, called KitKat Duo.
To promote KitKat, it has tied up with Paytm for cash back offer. The main
reason behind this is to increase brand penetration among new users, while
rewarding the existing users.
Besides a cross-promotion agreement with Kareena Kapoor and Arjun Kapoor
starrer Ki &Ka for the promotion of its new product KitKat Duo.