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Market Research Report : Branded chocolate market in india 2012

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For the complete report, get in touch with us at : info@netscribes.com …

For the complete report, get in touch with us at : info@netscribes.com

Indian confectionery industry constitutes the largest food processing segment in India. It can be categorized into sub sectors such as sugar based confectionery, chocolate based confectionery and gums. In India, chocolates are considered as indulgence foods which find its off-takes as a result of impulse buying. However, increased disposable income coupled with taste for luxury products have catapulted chocolate market towards growth. Constant innovation towards making products accepted by consumers have resulted in leading brands diversifying into different variants such as wafers and light weighed chocolates.

The report begins with an overview of the confectionery industry in India providing the market size and growth as well as information regarding market segmentation in India. This is followed by a primary segmentation of the industry. An overview of chocolate market provides an introduction to the sector and covers the market size and growth along with segmented consumption data in India. An analysis of the value chain has been included. A brief flowchart of the processing steps of cocoa beans has been highlighted. It is immediately followed by the procedure adopted by major players to manufacture chocolates. This section then divulges information about the distribution model prevalent in the sector. The following section deals with an EXIM trend over a period of five years. Porter’s Five Forces analysis concludes this section.

An analysis of the drivers explains the factors for growth of the market and includes tradition of gifting chocolates, attractive pricing, increase in disposable income and low per capita consumption of chocolates. India has woken up to the fad of chocolate being considered as a gift proposition. While even till few years back sweets were the only option in delicacy gifting, overt media exposure and smart marketing techniques have positioned chocolates as an alternative. Further, entry of major players in the country has allowed for easy availability of products to consumers. Another feature that works for this sector is the attractive pricing of products which particularly suits the Indian scenario wherein consumers seek economical products. Characteristics such as affordability and availability will come into play only if people have the purchasing power. Rising disposable incomes is a major driver primarily since chocolates are associated to being luxury items India. Finally, India has low per capita consumption of chocolates compared to other developed nations across the globe. It poses latent opportunity for growth as the country strives towards more off-takes for the product. However, the sector is also facing certain challenges. Factors such as rise in cocoa prices, high entry barriers and high excise and import duties pose as impediments for this sector.

Government participation in this sector covers Prevention of Food Adult


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  • 1. Branded Chocolate Market – India Branded Chocolate Market IndiaFebruary 2012
  • 2. Executive Summary  Indian Confectionery industry is considered to be growing at a1% CAGR over 20‐‐‐‐‐ Market  India is considered to be laden with great potential for growth of chocolates  Increased availability of a2 chocolates and growing taste for a3 chocolates aided with higher  purchasing power will lead to further development of the market  Drivers Challenges – Increase in disposable income – Rise in cocoa prices p Drivers &  Di & – Chocolate gifting – High entry barriers Challenges – Attractive pricing – High excise and import duties – Low per capita consumption of  chocolates  Premium chocolates  Chocolate boutique Trends   Dark chocolates  Entry of retailers and confectioners Major PlayersCompetition Company 1 Company 3 Company 2 Company 4 BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 2
  • 3. •Introduction•Market Overview•Import Export•Drivers & Challenges•Government Participation  p•Trends•Competition Competition•Strategic Recommendations•Appendix BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 3
  • 4. Greater consumer spending aided with demand for quality  products to boost the market Chocolate Market – Overview   Market Size and Growth • Chocolates though considered as impulse products in  INR bn India are witnessing growth over time 40 p% % T • Per capita consumption of chocolate is x1 gms 30 S • y1% of the consumption of chocolate is accounted  R 20 Q P for by the urban population base 10 • Initially, chocolates were limited to certain flavours Initially, chocolates were limited to certain flavours  0 such as milk or caramel 20-- 20-- 20-- 20-- 20--  With the passage of time, chocolate has been introduced   in new variants such as v1, etc.  Even variants such as chocolates with dry fruits and nuts  Segmentation of Consumption (2011) also created a new trend • Indian branded chocolate market is dominated by  c4% c1% Segment 1 player 1 and player 2 Segment 2  This proves to be detrimental to the small players as well  c3% as new entrants in the market Segment 3 Segment 4 • Rise in disposable income and enhanced availability  of products have resulted in the growth of the sector • Further, v2 chocolates which are in most cases  c2% imported have also witnessed a growing trendSource: BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 4
  • 5. Taste for premium products, specially by rich urbanites, have  led to increase in imports of chocolates Imports  Imports (Value) • Imports of chocolates have increased considerably  INR mn g g p owing to the demand generated for imported  2,500 , D chocolates 2,000 q% • Imported chocolates are seen as  v3 products and  1,500 C B considered as v4 products 1,000 A • Imported brands have contributed y2% of the total Imported brands have contributed y2% of the total  500 sales during festive seasons in 20‐‐ compared to y3%  0 in 20‐‐ 20----- 20----- 20----- 20----- Segmentation – Countrywise (2009‐10)  Segmentation – Countrywise (2010‐11) Country 1 Country 7 a% a1% Country 2 Country 8 f% Country 3 f1% Country 9 Country 4 Country 10 b% Country 5 b1% Country 11 Country 6 Country 12 e% c% e1% c1% d% d1%Source: BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 5
  • 6. Drivers & Challenges – Summary Challenges Drivers Rise in cocoa prices Tradition of Gifting Chocolates High entry barriers Attractive pricing High excise and import duties Increase in disposable income Low per capita consumption of  L it ti f chocolates BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 6
  • 7. Government Participation – Summary  Prevention of Food  Adulteration Act 1954 Adulteration Act 1954 Initiatives Food Safety and Standards  Go e Government policies e t po c es Act 2006 A 2006 BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 7
  • 8. Trends – Summary Demand for premium chocolates Surfacing of dark chocolates Key Concept of chocolate boutique Trends ` Demand for healthy options Entry of retailers and confectioners 8
  • 9. Public: Foreign Company – Company 1 (1/4) Company Information SAMPLE  Offices and Centres – India  Place 1, Country 1 Corporate Address Tel No. +123456 City Ci Fax No. +123456 Website http://www.abc.com/index.html Year of Incorporation 19‐‐ Ticker Symbol ‐‐‐‐ Stock Exchange Products and Services Products and Services Head Office Category Products/Services Category 1 Product 1 Key People Name N Designation D i ti Category 2 Product 2 Person 1 D1 Category 3 Product 3 Person 2 D2 Person 3 D3 Person 4 D4Source: POLYMER MARKET IN INDIA 2012.PPT 9
  • 10. Public: Foreign Company – Company 1 (2/4) Financial Snapshot i i lS h Key Ratios K i y‐o‐y change  Particulars  2010 2009 2008 2007 Total Income Profit (2010‐09) Total Income INR mn INR mn  Profitability Ratios Profit / Loss80,000 10,000 Operating Margin a a1 a2 a3 a4 X60,000 W Net Margin b b1 b2 b3 b4 V U Profit Before Tax Margin c c1 c2 c3 c440,000 5,000 Return on Equity d d1 d2 d3 d420,000 Return on Capital Employed e e1 e2 e3 e4 0 0 Return on Working Capital f f1 f2 f3 f4 20‐‐ 20‐‐ 20‐‐ 20‐‐ Return on Assets g g1 g2 g3 g4 Financial Summary  Return on Fixed Assets h h1 h2 h3 h4 Cost Ratios • The company incurred a net profit of INR ‐ mn both in FY 2010 and  Operating costs (% of Sales) i i1 i2 i3 i4 INR ‐ mn in FY 2009 Administration costs (% of  j j1 j2 j3 j4 • The company reported total Income of  INR ‐ mn in FY 2010,  Sales) registering an increase of p1% over FY 2009 registering an increase of p1% over FY 2009 Interest costs (% of Sales) Interest costs (% of Sales) k k1 k2 k3 k4 Liquidity Ratios • The company earned an operating margin of p2% in FY 2010 a  Current Ratio l l1 l2 l3 l4 decrease of ‐‐ percentage points over FY 2009 Cash Ratio m m1 m2 m3 m4 • The company reported debt to equity ratio of ‐ in FY 2010, a  Leverage Ratios decrease of p3% over FY 2009 Debt to Equity Ratio n n1 n2 n3 n4Key Financial Performance Indicators Debt to Capital Ratio o o1 o2 o3 o4 Interest Coverage Ratio p p1 p2 p3 p4 Indicators Value (dd/mm/yyyy) Efficiency Ratios Market Capitalization (INR) A1 Fixed Asset Turnover q q1 q2 q3 q4 Total Enterprise Value (INR) Asset Turnover r r1 r2 r3 r4 A2 EPS (INR) EPS (INR) Current Asset Turnover Current Asset Turnover s s1 s2 s3 s4 A3 Working Capital Turnover t t1 t2 t3 t4 PE Ratio (Absolute) A4 Capital Employed Turnover u u1 u2 u3 u4Source: Improved Decline BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 10
  • 11. Public: Foreign Company – Company 1 (3/4) Key Business Segments Key Geographic Segments 100%100% 80% 60% 100% 100% 50% 40% 20% 0% 0% 20‐‐ 20‐‐ Key Recent Developments Description  News • Compnay1 has presence across India with  ‐ manufacturing facilities and ‐ branch offices • Operates as a subsidiary of ABC • Is considered as one of India’s ‘Recognition 1’ and ‘ Recognition 2’ Business Operations • Has announced establishment of its first ‐ facility in India in 2010 which is slated to be  operational in 2012  • Employs k1 people directly and more than k2 indirectly in India Employs k1 people directly and more than k2 indirectly in India Source: BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 11
  • 12. Private: Foreign Company – Company 1 (1/4) Company Information SAMPLE  Offices and Centres – India  Place 1, Country 1 Corporate Address Tel No. +123456 Fax No. N.A. www.abc.com/index.html Website b City      Year of Incorporation 19‐‐ Products and Services Products and Services Category Products/Services Head Office Category 1 Product 1 Key People Name N Designation D i ti Category 2 Product 2 Person 1 D1 Category 3 Product 3 Person 2 D2 Category 4 Product 4 Person 3 D3 Person 4 D4Source: BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 12
  • 13. Private: Foreign Company – Company 1 (2/4) Financial Snapshot i i lS h Key Ratios K i y‐o‐y change  Total Income Particulars  2010 2009 2008 2007 Total Income Profit (2010‐09) INR mn Profit / Loss INR mn  Profitability Ratios30,000 2,500 Operating Margin a a1 a2 a3 a4 P Net Margin b b1 b2 b3 b425,000 0 2,000 N Profit Before Tax Margin c c1 c2 c3 c420,000 1,500 Return on Equity d d1 d2 d3 d4 M15,000 Return on Capital Employed e e1 e2 e3 e4 1,000 Return on Working Capital f f1 f2 f3 f410,000 500 Return on Assets g g1 g2 g3 g4 5,000 5 000 Return on Fixed Assets h h1 h2 h3 h4 0 0 Cost Ratios 2007 2008 2009 2010 Operating costs (% of Sales) i i1 i2 i3 i4 Administration costs (% of  j j1 j2 j3 j4 Financial Summary  Sales) Interest costs (% of Sales) Interest costs (% of Sales) k k1 k2 k3 k4 • Company incurred a net profit of INR ‐‐ mn in FY 2010, as  Liquidity Ratios compared to net profit of INR ‐‐ mn in FY 2009 Current Ratio l l1 l2 l3 l4 Cash Ratio m m1 m2 m3 m4 • It reported total Income of  INR ‐‐ mn in FY 2010,  Leverage Ratios registering an increase of p4% over FY 2009 Debt to Equity Ratio n n1 n2 n3 n4 Debt to Capital Ratio o o1 o2 o3 o4 • Earned an operating margin of p5% in FY 2010 a decrease  Interest Coverage Ratio p p1 p2 p3 p4 of ‐‐ percentage points over FY 2009 Efficiency Ratios • The company reported debt to equity ratio of ‐‐ in FY  Fixed Asset Turnover q q1 q2 q3 q4 2010, a decrease of p6% over FY 2009 Asset Turnover r r1 r2 r3 r4 Current Asset Turnover Current Asset Turnover s s1 s2 s3 s4 Working Capital Turnover t t1 t2 t3 t4 Capital Employed Turnover u u1 u2 u3 u4Source: Improved Decline BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 13
  • 14. Private: Foreign Company – Company 1 (3/4) Key Recent Developments Description  News • It has ‐ company‐owned manufacturing facilities at place 1 place 2 place 3 place 4 place It has ‐ company‐owned manufacturing facilities at place 1, place 2, place 3, place 4, place  Manufacturing 5 and place 6 and ‐ sales offices in place 7, place 8, place 9 and place 10 • In 2010, it was acquired by player 1 in an INR ‐‐ bn acquisition and has been functioning as  Acquisition an operating subsidiary • Its ‘Product 1’ is considered to be the ‘T1 Standard’ for chocolates in India • Sales for the period between Jan‐Sept grew t2% in India • Company has witnessed this t3% growth compared to a growth of t4% each year before  Business Operations Business Operations 2009 and over t5% in 2010  2009 and over t5% in 2010 • It spent INR ‐‐ bn on selling and distribution in the year 2010, registering a t6% higher  allotment than that of the previous year • It has increased its direct reach to consumers by t7% in 2011 • It has pioneered cocoa  cultivation in India since the time of 19‐‐ Miscellaneous • Has also worked with U1 University in projects related to cocoa research and released  clones and hybrids that help in improving cocoa yieldSource: BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 14
  • 15. Private: Foreign Company – Company 1 (4/4) Key Recent Developments Description  News • It has won the ‘Z1 Award’ for its ‘C1’ campaign It has won the  Z1 Award for its C1 campaign • Has won Z2 Awards Awards • It won Z3 awards • Has won Z4 Awards 2011 Has won Z4 Awards 2011 Source: BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 15
  • 16. Thank you for the attentionThe Branded Chocolate Market ‐ India report is part of Food & Beverage Industry Series. For more detailed information or customized research requirements please contact:Gaurav KumarPhone: +91 33 4064 6214E‐Mail: gaurav.kumar@netscribes.comResearch on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quick Research on India is a product of Netscribes (India) Pvt Ltd Research on India is dedicated to disseminating information and providing quickinsights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries onAbout NetscribesNetscribes is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment &  g g f g p y p p fbusiness research, business & corporate intelligence, content‐management services, and knowledge‐software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one‐stop shop designed to fulfil clients’ profitability and growth objectives.Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India, Disclaimer: This report is published for general information only Although high standards have been used the preparation Research on IndiaNetscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 16