Beruflich Dokumente
Kultur Dokumente
Table of contents
Sr. No Topic Page
No
1 Project Objective 6
2 An Overview of Chocolate Industry in India 8
3 Types of Chocolates 12
4 Categories of Chocolates & Form of Consumption 14
5 Chocolate Manufacturing Process 15
6 Market Size (by value & by volume) 16
7 Major Players & their Market Share 17
8 Cadburys India Limited A Study 18
9 Cadbury & The Worm Controversy 37
10 MARKETING - PROMOTION of CHOCOLATES in INDIA 46
11 Nestle India 50
12 Amul (GCMMF) 53
13 CAMPCO 59
14 Home-made Chocolates 62
15 Interesting Chocolate Facts 63
16 Problems & Challenges in Indian Chocolate Industry 64
17 External Factors affecting Growth of Chocolate Industry in INDIA 66
18 Growth Opportunities in Indian Chocolate Industry 67
19 Strategies for Growth & Success in India 69
20 Chocolate Boutiques & Designer Chocolates 70
21 Conclusion 72
22 Bibliography 73
Project Objective
This project aims at understanding the overall Chocolate Industry in India, the product
portfolios of different players in the market, various factors affecting the growth and success of
chocolate industry in India, the challenges and opportunities which the market offers and the
changing trends in the Indian Chocolate Industry. The project also covers a brief study of
Cadburys
India with reference to above points.
keener as overseas chocolate giants Hershey's and Mars consolidate to grab a bite of the Indian
chocolate pie.
Per Capita Chocolate Consumption (in lb) of first 15 countries of the world
Rank Countries Per Capita
Consumption (in lb)
1 Switzerland 22.36
2 Austria 20.13
3 Ireland 19.47
4 Germany 18.04
5 Norway 17.93
6 Denmark 17.66
7 United Kingdom 17.49
8 Belgium 13.16
9 Australia 12.99
10 Sweden 12.90
11 United States 11.64
12 France 11.38
13 Netherlands 10.56
14 Finland 10.45
15 Italy 6.13
INDIA, stands nowhere even near to these countries when compared in terms of Per Capita
Chocolate Consumption. The Indian chocolate industry is extremely fragmented with a
range of
products catering to a variety of consumers. We have the bars/slabs, jellies, lollipops, toffees
and
sugar candies.
Given India's mammoth population, it comes as a surprise that per capita chocolate consumption
in
the country is dismally low - a mere 20 gms per Indian. Compare this to over 7 kgs in most
developed nations.
However, Indians swallowed 22,000 tonnes of chocolate last year and consumption is
growing
at 10-12 percent annually.
The market size of chocolates was estimated to be around 16,000 tonnes, valued around Rs.
4.16 billion in 1998. Volume growth which was over 20% pa in the 3 years preceding 1998,
slowed
down thereafter.
Both chocolate and sugar confectioneries have abysmally low penetration levels, in fact, even
lower than biscuits, which reach 56 per cent of the households. Market growth in the chocolate
segment has hovered between 10 to 20%. In the last five years, the category has grown by 1415%
on an average and will expect it to continue growing at a similar rate in the next five years.
The market presently has close to 60mn consumers and they are mainly located in the
urban areas. Growth will mainly come through an increase in penetration as income levels
improve.
However, almost all of this consumption is in the cities, and rural India is nearly
chocolate-free. But the fact is that three quarters of Indians live in Rural Areas. Average
summertime temperatures reach 43 degrees Celsius in India. Chocolate melts at body
temperature of
36 degrees.
Per capita consumption of chocolates in India is minuscule at 20gms in India as compared
to around 5-8 kgs and 8-10 kgs respectively in most European countries. ... Awareness
about
chocolates is very high in urban areas at over 95%. ...
Growth of other lifestyle foods such as malted beverages and milk food have actually
declined by 3.7 per cent and 11.7 per cent, however the CHOCOLATES continue to grow at
the rate of 12.6%.
Low priced unit packs, increased distribution reach and new product launches can be
said to have fuelled this growth.
The launch of lower-priced, smaller bars of chocolate in the last two years and
positioning of chocolate as a substitute to traditional sweets during festivals, have boosted
consumption. This is also because chocolate, which was considered to be an elitist food, has
caught
the fancy of buyers looking for a lifestyle item at affordable cost.
Till recently, chocolate consumption had been restricted by low purchasing power in the
market. Chocolates and other cocoa-based snack foods were looked upon as food suitable only
for
the well-off.
After economic liberalization in 1991, major changes have occurred in food habits, partly on
account of rise in gross domestic product (GDP) growth and higher purchasing power in the
hands of
the middle-class representing a third of the total population. Availability of chocolate products
has
also exploded.
A study had projected that sales of the Indian chocolate industry would rise from $125/$130
million in 1998 to $175/$180 million by the year 2000 and to $450 million by the year 2005
which
ACTUALLY happened irrespective of various negative factors.
Per capita chocolate consumption continues to be low at about 200g per person, being
mainly consumed in urban areas. In the middle and higher income groups, 70 per cent of
children, 43
per cent of young adults and 16 per cent of adults consume chocolate.
Chocolate Consumption Structure - 2004
Children
55%
Adults
12%
Young Adults
33%
AC Nielsen ORG Marg report estimates the Indian Chocolate Industry worth at Rs
2,000-crore (Rs 20 billion)
Types of Chocolates
Depending on what is added to (or removed from) the chocolate liquor, different flavors and
varieties of chocolate are produced. Each has a different chemical make-up, the differences are
not
solely in the taste.
1. Unsweetened or Baking chocolate is simply cooled, hardened chocolate liquor. It is used
primarily as an ingredient in recipes, or as a garnish.
2. Semi-sweet chocolate is also used primarily in recipes. It has extra cocoa butter and sugar
added. Sweet cooking chocolate is basically the same, with more sugar for taste.
3. Milk chocolate is chocolate liquor with extra cocoa butter, sugar, milk and vanilla added.
This is the most popular form for chocolate. It is primarily an eating chocolate.
Cocoa is chocolate liquor with much of the cocoa butter removed, creating a fine powder. It can
pick up moisture and odors from other products, so you should keep cocoa in a cool, dry place,
tightly covered.
There are several kinds of cocoa
Low-fat cocoa has the most fat removed. It typically has less than ten percent cocoa butter
remaining.
Medium-fat cocoa has anywhere from ten to twenty-two percent cocoa butter in it.
Drinking or Breakfast cocoa has over twenty-two percent left in it. This is the cocoa used in
chocolate milk powders like Nestle's Quik.
Dutch process cocoa is cocoa which has been specially processed to neutralize the natural
acids in the chocolate. It is slightly darker and has a much different taste than regular cocoa.
Decorator's chocolate or confectioner's chocolate isn't really chocolate at all, but a sort of
chocolate
flavored candy used for things such as covering strawberries. It was created to melt easily and
harden
quickly, but it isn't chocolate.
Categories of Chocolates
Commercial Chocolates are available in the following forms:
1. Bars or Moulded Chocolates
2. Counts
3. Panned Chocolates (Gems)
4. clairs
5. Assorted Chocolates
Bars or moulded chocolates (like Dairy Milk, Truffle, Amul Milk Chocolate, Nestle Premium,
and
Nestle Milky Bar) comprise the largest segment, accounting for 37% of the total chocolate
market in
volume terms. ... Wafer chocolates such as Kit-Kat and Perk also belong to this segment. Panned
chocolates accounts for 10% of the total chocolate market. ... Wafer chocolates such as Kit-Kat
and
Perk also belong to this segment. ..
Form of Consumption
a. Pure Chocolates
b. Toffees
c. Cakes & Pastries
d. Malted Beverages
e. Wafer Biscuits & Baked Biscuits
f. Chocolate Desserts
What is conching?
Raw unprocessed chocolate is gritty, grainy and really not suitable for eating. Swiss
chocolate manufacturer Rudolph Lindt discovered a process of rolling and kneading chocolate
that
gives it the smoother and richer quality that eating chocolate is known for today. The name
'conching' comes from the shell-like shape of the rollers used. The longer chocolate is conched,
the
more luxurious it will feel on your tongue.
made to buyback the balance shareholding, after which the company would operate as a 100%
subsidiary of Cadbury Schweppes Plc
Ever since the Cadbury is in India in 1947, Cadbury chocolates have ruled the hearts of
Indians with their fabulous taste. The company today employs nearly 2000 people across India.
Its one of the oldest and strongest players in the Indian confectionary industry with an
estimated 68 per cent value share and 62 per cent volume share of the total chocolate market. It
has
exhibited continuously strong revenue growth of 34 per cent and net profit growth of 24 per cent
throughout the 1990s. Cadbury is known for its exceptional capabilities in product innovation,
distribution and marketing.
With brands like Dairy Milk, Gems, 5 Star, Bournvita, Perk, Celebrations, Bytes, Chocki,
Delite and Temptations, there is a Cadbury offering to suit all occasions and moods.
Today, the company reaches millions of loyal customers through a distribution network
of 5.5 lakhs outlets across the country and this number is increasing everyday.
VISION
Life Full Of Cadbury
Cadbury is an organisation which impacts and interacts with the consumers.
Cadbury is present in most happy occasions in the life of our consumer.
Our brands excite our consumer.
Cadbury is an expression of a consumer's life.
Business
Cadbury dominates the Indian chocolate market with above 65 70 % market share. Besides, it
has a
4% market share in the organized sugar confectionery market and a 15% market share in milk/
malted foods segment.
Plant locations
Cadburys manufacturing operations started in Mumbai in 1946, which was subsequently
transferred to Thane. In 1964, Induri Farm at Talegaon, near Pune was set up with a view to
promote
modern methods as well as improve milk yield. In 1981-82, a new chocolate manufacturing unit
was
set up at the same location in Talegaon. The company, way back in 1964, pioneered cocoa
farming in
India to reduce dependence on imported cocoa beans. The parent company provided cocoa seeds
and
clonal materials free of cost for the first 8 years of operations. Cocoa farming is done in
Karnataka,
Kerala and Tamil Nadu. In 1977, the company also took steps to promote higher production of
milk
by setting up a subsidiary Induri Farms Ltd near Pune. In 1989, the company set up a new plant
at
Malanpur, MP, to derive benefits available to the backward area. In 1995, Cadbury expanded
Malanpur plant in a major way. The Malanpur plant has modernized facilities for Gems, Eclairs,
Perk etc. Cadbury also operates third party operations at Phalton, Warana and Nashik in
Maharashtra.
Excise duty
14%
Chocolates/
Coated Wafer/
Confectionery
58%
Malt Foods
(Jar/Refill/Tin)
22%
Sales
3354
3892
4324
4716
0
1000
2000
3000
4000
5000
98 99 00 01
Years
Rs. Million
Cadburys Dairy Milk is the flagship brand of Cadburys not only in India but world wide. CDM
is
the single largest selling unit in India. It has annual sales to the tune of Rs 200 crore. CDM not
only
accounts for 30 per cent of the total chocolate market in value, but commands nearly 26 per cent
in
volume terms and close to 30 per cent of Cadburys annual turnover.
Moving from a predominantly adult positioning in the days of the legendary dancing girl ad, to
the teens and the tweens, when the Cyrus Broacha ads hit the airwaves, CDM has made a long
sweet
journey. In spite of the new categories being explored by Cadbury, its star brand remains
Cadbury
Dairy Milk (CDM) which continues to corner almost 30 per cent of the chocolate market.
Cadburys Temptation:
Cadburys Temptation is premium chocolate brand aimed for high value consumption. Various
variants available are Almond, Rum, Cashew & Orange. Cadburys temptation is priced at Rs. 40
Cadburys Celebration
Cadbury India launched its premium Celebrations range, which contains traditional Indian dry
fruits wrapped in Dairy Milk chocolate. This gifting option combines the pleasure of giving away
dry
fruits which Indians traditionally consider a premium, healthy gift with chocolate.
Cadbury
now has 90 per cent market share in this profitable segment.
5 STAR:
Consumer feedback suggested that the old 5 Star was too chewy, and people complained of it
sticking to their teeth. It was made softer and melted easily in the mouth & introduced as 5 Star
Crunchy
PERK:
Perk was made much lighter and the size of the bar increased to match Nestles Munch. Perk
had been under fire from Nestles deadly duo of KitKat and Munch, but after the relaunch, its
marketshare is two per cent more than KitKats. And, the five-year-old brand is now almost as
big as the decades-old 5 Star in size, both in the region of Rs 50-55 crore.
HEROES:
Packaging innovation has played a vital role in revamping of various Cadburys brands.
Heroes brand is simply a multi-pack with miniatures of all its most popular brands in a single
outer case.
Cadbury Desserts
for sweet moments after dinner
PRICING
After the roaring success of Nestles Munch and Chocostick, Cadburys empire struck back hard.
The Rs 5 price point accounts for more than half of all chocolate sales. Nestle had seized the
initiative at this price point, with its launch of Munch, now a roaring success (and the largest
selling
product at that price point). Today, Cadbury has four products at this price point: CDM, Perk, 5
star
and Gems and the five-rupee CDM bar is its single largest-selling SKU.
This is a potent price point in India, because the average purchasing power is abysmally
low, is what industry analyst have to say.
Nestle kicked off one of the biggest success the liquid chocolate category with its brand
Chocostick priced at Rs.2 three months ahead of competition. Cadbury did react with Chocki,
priced at Rs 2, expanding the concept of sachetisation to new frontiers. Chocki has been the
single
biggest growth driver for Cadbury as well as the entire chocolate category. The novelty of
the
format endeared itself to the existing customer. In less than one year, it constituted nearly 10 per
cent
of the total chocolate market, split equally between Cadbury and Nestle.
Distribution
Chocolate needs to be distributed directly, unlike other FMCG products like soaps and
detergents, which can be sold through a wholesale network. 90% of chocolate products are
sold
directly to retailers.
Distribution, in the case of chocolates, is a major deterrent to new entrants as the product has
to be kept cool in summer and also has to be adapted to suit local tropical conditions.
Cadbury's distribution network used to encompasses 2100 distributors and 450,000 retailers.
The company has a total consumer base of over 65 million. Besides use of IT to improve
distribution
logistics, Cadbury is also attempting to improve distribution quality. To address the issues of
product
stability, it has installed VISI coolers at several outlets. This helps in maintaining consumption
in
summer, when sales usually dip due to the fact that the heat affects product quality and thereby
offtake.
To avoid cannibalization of its higher priced products from lower priced ones, Cadbury is
setting up two separate distribution channels one for CORE business & other for MASS
markets,
with different stockists, wholesalers and retailers. One set will be dedicated to Cadburys highend
products and traditional chocolates. The other will cater to the mass market brands namely
Chocki,
Halls, Eclairs et al all products priced below Rs 3.
But today, Cadbury's distribution network reaches out to six lakh outlets each for its
chocolate & confectionery brands (i.e. total reaching12 lakh outlets).
Promotion
Typically it is said that chocolates are being eaten when everyone is happy. And this is
something advertising has always portrayed. But it is found chocolates are eaten under diverse
conditions and moods - when people are anxious, when they are sad, when happy - a whole
range of
emotions. Condensing these views & thoughts, it can be said chocolate is a true soul mate.
Someone
who is with you through the ups and downs of life, helping you bounce back. And that's what
Cadbury's Dairy Milk (CDM) positioned itself as - a special friend.
RE-INVENTING CABDURY
Kya Swad Hai Zindagi Mein redefined the way Indians looked at Cadbury
Chocolates. (The commercial showed a beautiful young lady overcoming all obstacles on the
cricket
ground, crossing boundary, watchman, securities and embracing her lover who won the game by
hitting a six). This theme introduced in around mid 90s bought instant growth to Cadburys
Dairy
Milk. The Ad campaign ran successful for about four years and immersed deeper inside hearts of
Indians.
In March 2002, Cadbury launched its next advertisement campaign for its flagship chocolate
brand, Cadbury's Dairy Milk (CDM). The campaign featured a television (TV) commercial that
was
significantly different from the company's earlier commercials for the brand. It featured Cyrus
Broacha interviewing college students and asking why they liked to eat CDM. This was followed
by
college students 'singing' their excuses for eating CDM. Just as the commercial seems all set to
end
with the students and Cyrus singing the famous CDM theme, 'Khane Walon Ko Khane Ka
Bahaana Chaahiye' (those who want to eat, will find excuses), a student comes up and
questions
Cyrus,
The advertisement aimed at conveying the idea that no specific occasion is required for
consuming CDM. This was a significant departure from CIL's strategy of appealing to
adults
in India, who sought a rational justification for indulging in chocolate consumption.
Cadbury roped in Preity Zinta for its PERK brand. Preity Zintas angelic dimples laid the
foundation for what would become the Indian teenagers favorite snack. After this campaign,
PERKS sale surged
Cadburys advertising has, over the past few years, aptly reflected Indias passion for
chocolates.
CADBURY ADVERTISEMENTS
Dil ko jab kushi choo jaye..."...kuch meetha jo jaye.."
Akhir barvi pass ho hi gaya." kuch meetha jo jaye..
CADBURY CELEBRATIONS
Looking wistfully at a photograph, Mr. Bachchan
thinks, he recollects the photo-shoot when he had
thrown the cap off his friend's head.
Aaj dil ne socha yun, kissi apne ko kya doon?
Jo usse kahe tum apne ho,
.jo apne aap mein khaas ho,
jo sirf taufa nahin ehsaas ho
Jisme rishto ki mithas ho.
Cadburys Celebrations
Rishto ki Mithas
CABDBURYS FIGHT-BACK
'Project Vishwas'
Steps to ensure quality & regain the confidence
Following the controversy over infestation in its chocolates, Cadbury India Ltd unveiled
'Project Vishwas', a plan involving distribution and retail channels to ensure the quality of its
products.
The company's team of quality control managers, along with around 300 sales staff, checked
over 50,000 retail outlets in Maharashtra and replaced all questionable stocks with immediate
effect.
The Vishwas programme was intended to build awareness among retailers on storage
requirements for chocolates, provide assistance in improving storage conditions and strengthen
packaging of the company's range of products.
Cadbury reduced the number of chocolates in its bulk packets to 22 bars from the present 60
bars. These helped stockists display and sell the products "safely and hygienically" 190,000
retailers
in key states were covered under this awareness programme.
dikhayi."
Saying which he takes a bite of the
chocolate.
Finally giving his personal assurance and
approval he says,
"Aaj kal mein badi
chain ki neend so raha hoon."
"Ab aapki favourite Cadbury Dairy Milk
naye purity seal pack mein."
pressure on advertisement budget and margins. However on the positive side, it helps in
expanding
the market.
BUYING BEHAVIOUR
Chocolates are consumed as indulgence and not as snack food, as prevalent in western
countries. Almost 75% chocolates are impulse purchases. Chocolates are bought predominantly
by
adults and gifted to children. On an average the wholesalers sells Rs50000/month of
Chocolates
(all brands included). Also the wholesaler usually deals in all kinds of FMCG goods, Foodstuff
in
addition to the chocolates. The items like chocolates are placed near the counter.
Chocolates are kept in cardboard boxes and are also delivered in the same. ... In a few of the
cases the chocolates were kept separately (as per equipment provided by the manufacturer e.g.
VISI Coolers), In addition to marketing promotions companies have been focusing extensively
on
the promotions by the sales staff. Also the companies can devise there marketing strategies that
are
catering to specific segments and are thus more effective.
II
NATURE OF RETAIL OUTLET
Chocolates are primarily sold through Kirana Stores, Gift stores, Medical Stores, canteens,
Pan-Bidi stores, Bakeries, Sweet Shops etc. This is true for chocolates also. The space allocated
for
the chocolates was less when compared to the total area of the shop. Of the space allocated for
chocolates, Cadbury brands occupied more than Nestle brands.
The chocolates category thrives on excitement. It's all about giving the consumer a
choice and taste which they enjoy.
III
STOCKING OF THE PRODUCTS
In most of the cases, various brands of chocolates are kept together. In some of the cases the
chocolates are stocked depending on the manufacturers provision. The chocolates are kept in
Glass
Jars and boxes These are provided by the respective companies along with the product. The
chocolates are kept there. But in most of the cases chocolates are stocked near the counter.
Ideally
the shopkeeper tries to keep chocolates within the reachable (sitting on the counter) distance.
Chocolates are kept at or below the eye level. This is to facilitate visibility of the chocolates
for the
customer who is visiting the store.
Medium size retailers sell chocolates of about Rs. 400 Rs. 800 per week while big
retailers sell chocolate worth Rs1000 or more per week.
NESTLE INDIA
Background
Nestle India was promoted by Nestle Alimentana, Switzerland, a wholly owned subsidiary of
Nestle Holdings Ltd., Nassau, Bahama Islands. Nestle is one of the oldest food MNC operating
in
India, with a presence of over a century
Nestle has a presence in 83 countries worldwide. It has a total number of 509 factories out of
which 220 are located in Europe, 153 in America and 136 in Africa, Asia and Oceania
The Swiss food giant has been in India for 90 years, with six manufacturing plants,
3,500 employees and almost $500 million in sales in 2002.
Business
Nestle has a presence in the following categories - Baby Food, Milk products, Beverages
(Coffee,
malted beverage), Chocolates & confectionery and other processed food products.
per cent.
Amul (GCMMF)
The Rs 2,748-crore GCMMF is in chocolate segment since quite some time. However, its market
share is just 5% and the company did not look aggressive till recently. Amul chocolates used to
come
in not so attractive packages and very little marketing effort was seen.
But things have changed and for good. Amul is now an important player in this growing
chocolate industry. It has firmed up its measures with marketing and new product launches and
revamping its packaging.
Amul just recently launched new chocolate brands in the market - Rejoice, Kite Bite and
Nuts `bout You.
10 for a 35 gm chocolate.
CAMPCO
Central Arecanut and Cocoa Manufactures and Processors Co-operative
A sudden withdrawal by the buyers of cocoa from the procurement operations
due to crash in the international market came as a shock to cocoa cultivators in India. Karnataka
and
Kerala Governments enthused, at this stage, the CAMPCO to enter on the scene to rescue the
farmers
from distress. CAMPCO willingly took up the responsibility to enter the cocoa market and
performed a savior's role.
As a strategy for survival in the International scene the CAMPCO played a major role in
establishing a name for Indian Cocoa, which hitherto had not been achieved. It procured cocoa
pods
from growers and adopting scientific processing methods to market standards, released dry cocoa
beans matching in quality in the world market equal to that of Ghana, Brazil and other cocoa
cultivation nations.
After entering into the Cocoa market, the Co-operative was able to export Cocoa Beans worth
Rs 40 million to European countries in the initial phase of operations. India was not known as a
Cocoa producer in the international Trading Community, since yearly production was hardly 5 to
6
thousand tonnes which is not even 0.3% of the total world consumption.
Through sustained efforts CAMPCO has been able to ensure reasonable prices to Cocoa
growers. The Co-operative had to face the problem of a limited internal market and unremunerative
export market. With the setting up of the chocolate manufacturing factory at Puttur, 50KM from
Mangalore, the Co-operative has been able to increase local consumption of cocoa based
products
and to export value added semi-finished products. With a view to creating a permanent
demand
and a steady market for the
beans, CAMPCO established a Chocolate Manufacturing Factory at Kemminje village in
Puttur Taluk in Dakshina Kannada district, adopting foreign technical advancement in
chocolate making. The Factory was set up in 1986 at an initial investment of Rs.116.7
Millions.
CAMPCO CHOCOLATES
CURRENT STATUS of CAMPCO
However, the company does not have much visibility in the Indian market. No advertising are
seen
being aired on TVat least not on the prime channels. The company seems to have restricted its
marketing efforts in south India only.
Campco, being a co-operative is functioning under pressures from various political parties and is
surrounded by various controversies all of which arising out of internal disputes.
Home-made Chocolates
Another area of chocolate industry in India is HOME-MADE CHOCOLATES. This segment
is
highly fragmented and operates independently. They are more pronounced for manufacturing
distinct
flavors and varieties of chocolates in various shapes and size. But, these chocolates are usually
priced at a higher price than that available for branded products for the same quantity. Housewives
from elite class usually indulge in this kind of business. They usually operate in local area and
through their contact network. Some home-made chocolate manufacturers manufacture really
attractive GIFT CHOCOLATES.
because smaller retailers have stuffed fridges and coolers supplied by the cola companies Coke
and
Pepsi with chocolates.
Nestle and Cadbury have tried to provide loans for retailers to buy fridges, but to hold down
power costs the shopkeepers switch off the fridges at night. As a result the cocoa fat melts and
migrates to the main body of the chocolate bar. When the cooling is switched on in the morning,
the
cocoa fat solidifies and turns white, presenting a bizarre, un-sellable white on black form. Nestle
tried to provide fridges with see-through doors, but was appalled to see its chocolates
sandwiched between dead chicken, butter and vegetables.
Small coolers were provided to retailers to keep the chocolate from melting, but that didn't quite
do
the trick. Electricity costs money and is not provided in a uniform way, so on and off the
electricity goes and the product may suffer sometimes
3. RAW MATERIALS:
Cocoa is the key raw material and accounts for around 35% of the total material cost
(including packaging) of chocolates. The price of cocoa has been hitting a new high of late.
Cocoa
prices are at a near 20-year high at $2358 per ton, up from $900 a year back. India does not
produce
cocoa to any noteworthy extent but is a large consumer of chocolates. Consumption of
chocolates
and other cocoa-based products, especially among the middle class, has been growing.
4. TRANSPORTATION:
Chocolate needs to be distributed directly, unlike other FMCG products. 90% of our products are
sold directly to retailers. Building such a direct network in rural areas is a daunting task since the
infrastructure is poor in India in rural areas.
5. THREAT FROM IMPORTED BRANDS:
Free availability of imported brands bought through illegal routes pose a threat to the domestic
chocolate industry. Usually, these imported chocolates taste better than domestic chocolate due to
recipe difference. Hence consumers who are willing to spend a little more, prefer these imported
chocolates.
However, the premium brands, which come through official channels, do not pose a threat to
the market, as these cater to a small niche market. However there is a lot of dumping from
neighboring countries like Dubai, Nepal, etc of inferior brand of imported chocolates. These are
not
only of low quality, but are brought very near to their expiry dates. Most of the cheap chocolate
brands that are available do not meet Indian Food Regulations.
Market growth driven by overall economic growth and urbanization also contributes. An
overall
booming economy will consume tonnes of chocolates because consumer spending increases.
Also, the absolute number of consumers in middle class & upper middle class increases.
Rupee depreciation improves export realizations, however it also makes import of raw
material
(esp. cocoa) expensive.
Rural expansion:
Rural market and small town markets are seen as the key to spurring double-digit growth.
Products such as liquid chocolate packs from the existing portfolio are expected to enable rapid
acceptance.
Leverage India for offshoring:
India is being leveraged for export of finished goods, as a superior destination for
manufacturing best practices, and for BPO opportunities.
All the above points bring us to a conclusion that theres an immense scope for growth of
chocolate industry in India not only in its offering pattern but also for increment in its total
consumption value and size.
Extensive range of Baby chocolates are available which are beautifully wrapped in pinks and
blues and embellished with decorations like baby bottles, satin ribbons, silk flowers, bibs and
bows
are also available and are getting very popular in elite classes.
Designer chocolates are tailored for customers who're looking at gifting chocolates with a
personalized touch. Embossing of names, logos of companies and personalized message on the
chocolates are fast becoming popular.
There are 1,000 varieties of designs to choose from -- ranging from good luck charms, X'mas
figurines and animals -- and nearly 50 kinds of gift packaging available to suit any particular
occasion.
From festive occasions to personal celebrations to corporate gifting, made-to-order
chocolates are most sought after. And we are not talking about the boring old rectangular slabs of
cocoa
These designer chocolates focus a lot of attention on packaging. The packaging of these products
includes materials like imported mesh, gold foils and brocade, lace and satin-draped boxes being
in
heavy demand.
With the rise in disposable incomes, people do not mind spending on designer chocolates,
most of which costs between Rs 500 and Rs 2,500 per kg. Few chocolate makers cater only to
corporate clients for festive occasions, product launches, new employee joinings and
management
training programmes. From logos to company names being embossed in chocolates of different
shapes and colours, these are all in demand.
CONCLUSION
The Indian Chocolate Industry is a unique mix with extreme consumption patterns, attitudes,
beliefs, income level and spending. At one hand, we have designer chocolates that are consumed
when priced at even Rs 2500/kg while there are places in India where people have never even
tasted
chocolates once.
Understanding the consumer demands and maintaining the quality will be essential.
Companies will have to keep themselves abreast with the developments in other parts of the
world.
PRICING is the key for companies to make their product reach consumers pockets. Right
pricing will make or break the product SUCCESS. Economical distribution of the products will
also be equally important.
The companies strategies should focus on driving sales through a right product mix,
efficient materials procurement, reduced wastages, increased factory efficiencies and
improved
supply chain management.
Theres an immense scope for growth of chocolate industry in India - geographically as well
as in the product offering.
The Indian Chocolate Industry is destined to grow and will do so in the future.
Bibliography
www.rediff.com
www.indiainfoline.com
www.business-standard.com
www.India-stats.com
www.Agencyfaqs.com
www.Equitymaster.com
www.indiantelevision.com
www.myiris.com
www.ibef.org
www.thehindubusinessline.com