The chocolate
industry in
Indian Chocolate industry Grown at the CAGR 23% by volume between the years 2013-2018 and reached at 3,41,609 Tons.
The chocolate
market is predominantly urban with coverage of 95 %. The sales volume has
decreased by 5% in the last year and the chocolate market had declined with the
average consumption coming down by 25% from 16000 tones to the current level of
125000 tones
Chocolate consumption in India is extremely low. Per capita consumption is around 160gms in the urban areas, compared to 8-10kg in the developed countries. In rural areas, it is even lower. Chocolates in India are consumed as indulgence and not as a snack food. A strong volume growth was witnessed in the early 90's when Cadbury repositioned chocolates from children to adult consumption.
The biggest
opportunity is likely to stem from increasing the consumer base. Leading
players like Cadbury and Nestle have been attempting to do this by value for
money offerings, which are affordable to the masses.
Cadbury, a subsidiary of Cadbury Schweppes is a dominating player in the Indian chocolate market with strong brands like Dairy Milk, Five Star, Perk, and Gems etc. Dairy milk is the largest chocolate brand in India. Chocolates & Confectionery contribute to 75% of Cadbury’s turnover. Cadbury also has a strong brand Bourn vita in the malted health drink category, which accounts for 24% of turnover. The parent Cadbury Schweppes during 2001 made an open offer for acquiring the 49% non-promoter holding in the company. It has already acquired over 90% of the equity and proposes to buy back the balance equity and delist the stock from Indian bourses.
Looking at the Future
The consumption of chocolates in India is among the lowest in the world. A comparison with the world wide industry average is an eye opener. In India the average per capita consumption is a mere 20 gm compared to the world average per capita consumption of 2.24kg.
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Moreover data on worldwide chocolate consumption indicates that – in the mature markets this figure is as high as 9.36kg, while even the emerging markets total up to 1.16 kg. While looking at the consolidated averages –would be misleading, even the consumption among the potential consumers of chocolates is extremely low as compared to the world average.
|
Sales |
Market Share |
Tonnage |
Population/(Million) |
GMS/Consumer |
|
Urban Sales |
80 % |
12800 |
45.7 |
280 |
|
Rural Sales |
20 % |
3200 |
34.5 |
40 |
|
Total |
100
% |
16000 |
80.2 |
200 |
As eating habits of large parts of Indian society are becoming consistent with the rest of the world; the category is poised for a significant growth. The wafer wars between Perk and Kit Kat is an interesting indication of the times to come and it has reached almost the same intensity as the cola wars!!
As these new players and existing companies introduce new type of chocolates, distinction between chocolates, biscuits, ice-cream will become less and many hybrids product will grow. Along with this the potential to expand the consumer base by incorporating a wider array of taste and needs of the consumers. Segmentation of market based on consumer age is increasingly becoming irrelevant.
There are expected to be many products target at specific new segments. This is very obvious with the emerging segmentation policy of using the ego states. A shift in media strategy of various companies can also be estimated. Instead of present use of mass media, specialized media targeted at different segment will catch the fancy of media planners.
At the same time one can see an increasing association between the brands and various highly published events in order to increase the brand equity in the minds of all the stake holders. Further there will be lot of improvement in packaging and modification of products as per Indian conditions.