In India’s booming chocolate market aren’t black, white or milk.

Instead, chocolates with

toys (such as Kinder Joy) have caught the attention of young Indian consumers. From
sales of only around Rs66 crore in 2009, the number has grown 15 times to Rs1, 007.5
crore in 2014. And these chocolates now

Figure No: 1.4 Most Popular categories

comprise the third biggest segment in value terms. The overall market, however, is
dominated by chocolate tablets and count lines, which are boxes of bars packed and
supplied to retailers to be sold individually.

Delicious forecast

Out of the three most popular categories in 2014, count lines are expected to be the
fastest growing segment in the next few years—with a 87% growth in value by 2019.
Boxed assortments and chocolates with toys will follow, with a

Figure No: 1.5Sales forecast of most popular categories

growth by over 68% between 2014 and 2019. Still, with Rs6,905.98 crore in sales,
tablets with continue to dominate India’s chocolate market in terms of value.

Confectionery, delicacies or sweetmeats that have sugar as a principal ingredient,

combined with coloring matter and flavoring and often with fruit or nuts. In the United
States it is usually called candy, in Great Britain, sweets or boiled sweets. Non-
chocolate candy is roughly divided into two classes, hard and soft; the distinction is
based on the fact that sugar when boiled passes through definite stages during the
process of crystallization. Fondant, or sugar cooked to the soft stage, is the basis of
most fancy candies, such as chocolate creams.

Sweetmeats, long known in the Middle East and Asia and to the ancient Egyptians,
were at first preserved or candied fruits, probably made with honey. One of the earliest
functions of candy was to disguise unpleasant medicine, and prior to the 14th cent.
Confections were sold chiefly by physicians. Medieval physicians often used for this
purpose sugarplate, a sweetmeat made of gum dragon, white sugar, and rosewater,
beaten into a paste. One of the earliest confections still surviving is marzipan, known
throughout Europe; it is made of almonds or other nuts, pounded to a paste and
blended with sugar and white of egg. In the Middle Ages it was sometimes molded into
fancy shapes and stamped with epigrams.

Sugarplums, made of boiled sugar, were known in England in the 17th cent., but it was
not until the 19th cent. that candymaking became extensive. The display of British
boiled sweets at the national exhibition of 1851 stimulated manufacture in other
countries, especially in France. In the United States in the middle of the 19th century
about 380 small factories were making lozenges, jujube paste, and stick candy, but
most fine candy was imported. With the development of modern machinery and the
increasing abundance of sugar, confectionery making became an important industry. In
2001, estimated retail sales of chocolate, other candy, and gum in the United States
had reached $24 billion, and more 1,400 new items of candy were introduced.

CHAPTER
2
 CONFECTIONARY
INDUSTRY PROFILE

CONFECTIONARY INDUSTRY AT GLOBAL LEVEL

The global confectionery industry revenue is estimated to reach $176 billion by 2018
with a CAGR of 3.0% over the next five years (2013-2018). Rising disposable income,
increasing awareness of health and wellness, higher population, and consumer
spending are the major industry drivers.

Lucintel, a leading global management consulting and market research firm, has
analyzed the global confectionery industry and presents its findings in “Global
Confectionery Industry 2013-2018: Trend, Profit, and Forecast Analysis.” The industry
consists of sales of chocolate confectionery, sugar confectionery, gum, cereal bars, and
other confectionery. Europe has the highest regional share among all the regions. Asia
Pacific (APAC) emerged as the most growth potential region over 2007-2012, driven by
growing population and GDP growth in developing nations. A combination of factors
such as rising population and consumer spending affects market dynamics significantly.

As per the study, introduction of confectionery categories and new product variants of
different tastes are ensuring higher acceptability of these products. Increasing
urbanization, hectic lifestyles, and more women in the workforce globally are increasing
the demand for confectionery food. The biggest challenges for the industry include
health issues, as well as inflation, employment rate, increasing government regulation,
and changing consumer preferences, among others. The chocolate segment is forecast
to witness the highest growth during 2013-2018. Special occasions and celebrations are
expected to increase confectionery sales.

This study provides an overview of the global confectionery industry, tracking three
market segments of that industry in four geographic regions. Thus, a total of 12
segments of the global confectionery industry are tracked. The report studies the
manufacturers of chocolate confectionery, sugar confectionery, and gum, cereal bars
and other confectionery. It provides a five-year annual trend and forecast analysis that
highlights market size, profit, and cost structure as well as opportunities for the regions
of North America, Europe, APAC, and Rest of the World. This comprehensive guide
from Lucintel provides readers with valuable information and the tools needed to
successfully drive critical business decisions with a thorough understanding of the
market's potential. This report will save Lucintel clients hundreds of hours in personal
research time on a global market and it offers significant benefits in expanding business
opportunities throughout the global Confectionery industry analysis. In a fast-paced
ever-changing world, business leaders need every advantage available to them in a
timely manner to drive change in the market and to stay ahead of their competition. This
report provides business leaders with a keen advantage in this regard by making them
aware of emerging trends and demand requirements on an annual basis.

CONFECTIONARY INDUSTRY AT NATIONAL LEVEL

Indian confectionery market mirrors its global counterpart with a well-entrenched
presence of multinational companies, wide portfolio of brands, frequent product
launches, intense marketing and advertisement campaigns. Consumption of
confectionery products is not restricted to children anymore. Adults have opened up to
consumption of confectionery in a big way. Several companies are launching
confectionery products targeting adults.

Confectionery in India is broadly classified as chocolate based confectionery, sugar

based confectionery and gum based confectionery. The categories are further classified
as follows:

Confectionery sector in India is well consolidated with top players holding a major share
of the market; local subsidiaries of global confectioners are among the leading players
in India. Large players have a significant presence in chocolate confectionery market
while smaller players primarily operate at a regional level and have sizeable base in
sugar-based confectionery market

The Indian confectionery market was valued at around INR 95 billion in 2012-13,
growing at an annual rate of 10-12% since 2009-10. Of the total market, sugar
confectionery holds a market share of around 46% and the rest by chocolate and gum
confectionery segments. Owing to lower unit price than chocolate confectioneries, sugar
confectionery segment has registered higher volume sales over the recent years
Traditionally, small domestic players catering largely to a regional market accounted for
a major share of the sugar confectionery market. However, in the recent years,
multinational players have entered this market and have introduced quality products.
Chocolate consumption is mainly centered around semi-urban and urban areas due to
foreign exposure, rising disposable income and consumers’ impulse buying. Players
have identified age-specific niche market segments within the chocolate confectionery
market and are undertaking intense advertising campaign to ensure effective brand
communication and positioning.

The confectionary market in India has a well entrenched presence of multinational

players such as Mondelez (formerly Cadbury India), Nestle, Perfetti Van Melle, Mars
India and Lotte as well as large domestic players such as Amul, Parle, ITC, Ravalgon
and Candico. Multinational companies such as Ferrerro, Hersheys and Lindt have a
strong presence in the premium chocolate market. In the chocolate confectionery
segment, Cadbury holds a market share of around 65-70%, followed by Nestle at
around 20%