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 58bn in FY2014, and is expected to grow at a CAGR of 16% to reach INR 122bn by 2019.
The industry is dominated by Cadbury India (now Mondelez) and Nestlé 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 such as Cadbury and Nestlé have successfully introduced their own dark chocolate brands, like Bournville and Nestlé Dark Chocolate.
“An increase in the purchasing power of consumers and exposure to global chocolate brands will drive the premium chocolate market,” said ValueNotes senior research analyst Tejaswee Shrestha. “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 30g and priced up to INR 10 is the fastest growing segment in rural areas.
The ValueNotes report – Chocolate Industry in India: 2014-2019 – looks at the industry, including 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.
© FoodBev Media Ltd 2018