Chocolate accounts for a small share of the sugar and confectionary market in India. However, due to increasing consumption levels the industry offer significant prospects, especially for foreign players. The report provides a snapshot of the market indicating the size and growth as well as sales breakdown by price points and geography. A brief analysis of drivers and challenges primarily focuses on cultural influences and manufacturers’ initiatives in driving growth, while challenges include raw material prices and artificial price inflation from government duties. The report also explains the shift in consumer preferences, channel trends, role of imports, and the possibility of private label products.

1. Branded Chocolate - India
December 2008

2. Executive Summary
Estimated worth USD XX mn in 2008 & USD YY mn in 2009
a% of products sold are priced in INR X – Y range
Market
Profit Margins range between a – b%
LE
Drivers: Opportunity to expand due to low penetration, strong tradition of gifting sweets,
Drivers & attractive pricing driving volumes, demand from new segments
Challenges
P
Challenges: Inflationary pressures on raw material prices, lack of government initiative, and
duopolistic element of the market
M
Trends SA
Changing palate of consumers from Indian sweets to chocolate
Growing distributional channels
Foreign brands targeting a niche premium segment
Major retailers foraying into the industry
Market is dominated by A and B
Competition X and Y are other domestic players
Foreign players in the market are U and V, catering only to the premium segment
BRANDED CHOCOLATE – INDIA.PPT 2

3. •Market Overview
•Drivers & Challenges
•Trends
•Competition
•Key Developments
BRANDED CHOCOLATE – INDIA.PPT 3

4. The branded chocolate market is growing with the bulk of sales
concentrated in mid-price range products
Overview Size and growth (estimates)
•Chocolate represents approximately c% of the USD mn
confectionary market in India with the rest 400
b% Z
accounted by sugar confectionary
300
•Industry estimated to be worth approximately a%
Y
LE
200
USD XX mn in 2008 X
P
100
•Market is expected to grow to approximately
USD YY mn in 2009 0
Characteristics
SAM
•Urban markets account for the major share
2003
Price points and consumption
Price points (INR) vs. sales
2006 2009
Consumption
and also for a higher penetration rate of ~a%
2 u%
•Various price points exist with the mass Rural
market existing in INR 2 – INR 10 range b%
5 - 10 v%
•Profit margins range between u – v% based on
a%
the price point of the product Other Urban
w%
Source:
BRANDED CHOCOLATE – INDIA.PPT 4

5. Drivers & Challenges
Challenges
Drivers Soaring price of raw materials
Sweet taste preference in an under-
penetrated market High excise and import duties
Tradition of gifting sweets High entry barriers due to duopolistic
market
Attractive pricing
Innovation through brand and product
variants
BRANDED CHOCOLATE – INDIA.PPT 5

6. Key Trends
Shift in consumer preferences Channel Trends
Driven by marketing initiatives, consumer Independent retailers are the largest channel
preferences are slowly changing in favour of but modern retail is growing faster
chocolate
Trends
Foreign brands target premium market Possibility of private labels
Foreign or imported brands are successfully Retailers may launch their own chocolate
targeting the lucrative premium segment in brands in a bid to grow their private label sales
urban markets
BRANDED CHOCOLATE – INDIA.PPT 6

7. X is the market leader followed by Y, which dominate the market
with a collective share of more than a%
Major Players Estimated Market Share
• X is the leading player
X is planning to increase sales by a-b% by 20-- Company Y
Y accounts for over a% of the market b%
Z and other chocolate wafers constitute b% of the total
LE
chocolate market and have been growing at c% annually Others
d% c% Imported
• Recent foreign players in the market
• Other domestic companies are Y and Z
MP
U in a JV with V , and W currently catering to the premium
segment only
a%
A
Company X
Parameter
Revenue
X
INR XX crore(20--)
S Y
INR YY crore (20--)
Market Size a% b%
Price range INR x-y INR y-z
Brands A,B,C,D U,V,W
Source:
BRANDED CHOCOLATE – INDIA.PPT 7

8. Thank you for the attention
The Branded Chocolate report is a part of Research on India’s Food & Beverage Industry Series.
For more detailed information or customized research requirements please contact:
Gagan Uppal Gaurav Kumar
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BRANDED CHOCOLATE – INDIA.PPT 8