CHOCOLATES
HISTORY• Used as a drink for nearly all of its history• Excavation by archaeologists in November 2007 revealed  cultivatio...
•   Cacao beans also used as tax•   First cocoa bean brought to Europe by Columbus•   Europeans compartmentalized its use ...
Breakthroughs•   At the end of the 18th century, the first form of solid chocolate was invented in    Turin by Doret. This...
• It is believed that the English company, J. S. Fry & Sons made  the first chocolate for eating in 1847, followed in 1849...
• Rodolphe Lindt invented the process called conching, which  involves heating and grinding the chocolate solids very fine...
• In 1912, The Whitman Company produced the boxed assortments  called Whitmans Samplers. This is the first company to have...
Facts and Figures• Much of the world’s cocoa comes from West Africa, which provides  70% of total output. The two main sup...
• Farmers grow around three million tonnes of cocoa beans each year. Of  these, about 700,000 tonnes go to the USA. UK man...
• Chocolate needs to be distributed directly, unlike other  FMCG products like soaps and detergents, which can be  sold th...
• Chocolate manufacturers recognise that the small growers are the  industry’s lifeblood, and that our enjoyment of chocol...
International Trends• Research related the consumption of chocolates with several health  benefits such as reduced stroke ...
• The widespread use of children in cocoa production is controversial  not only because of the usual concerns about child ...
• Bulk Candy: Offering a wide assortment of candies of all types  (including non-chocolate), these stores often charge by ...
Per Capita Chocolate                    Consumption                       Consumption (in lb)1. Switzerland               ...
Indian Market•   The Indian chocolate industry is extremely fragmented with a range of products    catering to a variety o...
• Average summertime temperatures reach 43 degrees Celsius in India.  Chocolate melts at body temperature of 36 degrees.• ...
Drivers and Challenges• Drivers: Opportunity to expand due to low penetration, strong tradition  of gifting sweets, attrac...
Stakeholders
•   Banking and insurance services,•   Packaging firms,•   transport specialists.•   Occasions•   Users
Individuals  Florists                                 Families                ConsumersUse as change                   Res...
People           gifting                 WomenChildren             Individuals       Men                      Senior      ...
Working            Diabetic     women            Women Calorie-Conscious               Women       Mothers Women          ...
Men in the             service              sector CalorieConscious                 Diabetic               Men  men       ...
With other health                issues  With         Senior          Living alonediabetes       Citizens             Livi...
Corporate                 Gifting                                    While                                   visitingOn Oc...
Joint                Nuclear           FamiliesFamilies              Families
Bakeries and                   pastry shops    Using                                       Servingchocolates for          ...
Manufacturers of                other chocolate                related products                                    Manufac...
By toll taxBy Shops   Use as change   collection                            points
Delivering            chocolates with               bouquets Making                       Making bouquetsChocolate       F...
Top 10 global                       confectionary companiesCompany                                 Net Sales 2010 (US$ mil...
Indian Players• The volume of chocolate produced in India in a year is around  30,800 tons.• The major players in the choc...
Value Parameters• Pricing*• Offerings in every category*• Excitement*• Value for money#• Taste#• Calorific Value#• Breakin...
Front end supply chain• Producers: farmers• Raw materials: e.g. cocoa beans, sugar, milk, wood for paper  wrappers, alumin...
Strategy Canvas10 9 8 7 6 5 4                     Cadburys 3                     Nestle 2 1                     Amul 0    ...
Factories in india• 6 factories, 1 center for cocoa operations
Need Gaps according to ConsumerInsights•   Lack of low-range Sugar Free chocolates•   Lack of good Gifting Options•   Very...
Need Gaps (Front End)• Very limited reach to interiors due to low  melting temperature of chocolates
Need Gaps (Back End)• Very little Cocoa Production in India
Frequency of Consumption                            At least once a month      1%           8%   12%                      ...
Favourite form of chocolates                             Brownies            1%   4%          Candies                     ...
Type of chocolate preferred                                Chocolate with fillings        5%   4% 5%                      ...
Least preferred type                          candys        1%             14%          Cant pick any of31%               ...
Preference37%                40%                         Domestic Premium                         Brands                  ...
Chocolates should not have                             Caffeine     6%                      Calories           9%   11%6% ...
Buying chocolates online      2% 5%                           No, and I never even                  44%      intend to    ...
Sugar free Chocolates29%                              No                              Yes                       71%
Tried sugar free chocolates                        I do not like the taste but                        will go back to it a...
Not tried sugar free chocolates      15%                     37%                               Would like to try it for   ...
Guilt feeling in chocolate                  consumption      5%                 7%                     Absolutely no guilt...
Gifting Chocolates            2%      12%                 18%                             I dont gift chocolates          ...
Are exclusive chocolate shops      overpriced?        3%             7%39%                18%                          Not...
Have you ever bought a chocolate      bouquet?            15%37%                           No, and not even               ...
Company while consuming      chocolates                       30%46%                                alone                 ...
Percentage of people from amongst      people who feel guilty that have tried      sugar free chocolates44%               ...
Percentage of people from amongst people who do not feel guilty that have tried sugar free chocolates22%                  ...
People who feel guilty and haven’t      tried sugar free chocolates      5%17%                           Would like to try...
Thank You        Tanushree Prasad
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Chocolates presentation

  1. 1. CHOCOLATES
  2. 2. HISTORY• Used as a drink for nearly all of its history• Excavation by archaeologists in November 2007 revealed cultivation of cacao in Peurto Escondido from about 1100- 1400 BC.• Played a major role in the royal and religious events of ancient civilizations.
  3. 3. • Cacao beans also used as tax• First cocoa bean brought to Europe by Columbus• Europeans compartmentalized its use as sweets and desserts.• Industrial Revolution brought about major changes in the manufacturing process.
  4. 4. Breakthroughs• At the end of the 18th century, the first form of solid chocolate was invented in Turin by Doret. This chocolate was sold in large quantities from 1826 by Pierre Paul Caffarel• In 1819, F. L. Cailler opened the first Swiss chocolate factory.• In 1828, Dutchman Coenraad Johannes van Houten patented a method for extracting the fat from cocoa beans and making powdered cocoa and cocoa butter. Van Houten also developed the "so-called" Dutch process of treating chocolate with alkali to remove the bitter taste. This made it possible to form the modern chocolate bar.
  5. 5. • It is believed that the English company, J. S. Fry & Sons made the first chocolate for eating in 1847, followed in 1849 by the Cadbury brothers.• Daniel Peter, a Swiss candle maker, joined his father-in-laws chocolate business. In 1867, he began experimenting with milk as an ingredient. He brought his new product, milk chocolate, to market in 1875.• He was assisted in removing the water content from the milk to prevent mildewing by a neighbour, a baby food manufacturer named Henri Nestlé
  6. 6. • Rodolphe Lindt invented the process called conching, which involves heating and grinding the chocolate solids very finely to ensure that the liquid is evenly blended.• This enabled Milton Hershey to make chocolate even more popular by mass producing affordable chocolate bars.• In 1908, The Hershey Chocolate Company makes the first milk chocolate bar with almonds
  7. 7. • In 1912, The Whitman Company produced the boxed assortments called Whitmans Samplers. This is the first company to have a drawing of different chocolates located in one box• In 1914, L. S. Heath & Sons, Inc. makes the first Heath Bar in Robinson, Illinois.• In 1973, The Cadbury Company opens Chocolate World theme park in Bournville, England.
  8. 8. Facts and Figures• Much of the world’s cocoa comes from West Africa, which provides 70% of total output. The two main suppliers are the Cote d’lvoire and Ghana.• Most significant producer outside of this region is Indonesia.• In these countries the cocoa beans are typically grown on small family farms. Most of these are only two to three hectares in size. Each farm produces around one tonne of beans each year.
  9. 9. • Farmers grow around three million tonnes of cocoa beans each year. Of these, about 700,000 tonnes go to the USA. UK manufacturers import about 215,000 tonnes.• Global production is about 3.5 million tonnes, valuing annual production of the commodity at about USD 10 billion, roughly one-tenth of the value of sugar output. The small size makes it difficult for the market to absorb significant inflows and outflows from massive global investment funds.
  10. 10. • 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.
  11. 11. • Chocolate manufacturers recognise that the small growers are the industry’s lifeblood, and that our enjoyment of chocolate products depends on their wellbeing.• So, the industry is working with other organisations on the ground in West Africa on a series of programmes designed to improve the economic and social wellbeing of the cocoa farming villages and to ensure that small farmers secure a sustainable future.
  12. 12. International Trends• Research related the consumption of chocolates with several health benefits such as reduced stroke risk, cholesterol and blood pressure, among others.• Mars, Incorporated is proud to be the first global chocolate company to commit to fundamentally changing the way sustainable cocoa farming practices are advanced by aiming to certify its entire cocoa supply as being produced in a sustainable manner, by 2020.
  13. 13. • The widespread use of children in cocoa production is controversial not only because of the usual concerns about child labor and exploitation, but also because up to 12,000 of the 200,000 children working in Ivory Coast, the worlds biggest producer of cocoa, may be victims of human trafficking or slavery.• Gift giving: Like flower shops, these businesses often focus on themed chocolates and delivery
  14. 14. • Bulk Candy: Offering a wide assortment of candies of all types (including non-chocolate), these stores often charge by the pound...or half pound!• Premium or Unique: High-end, specialty items, imports from areas with historical processes• Ethical: Free trade or other, quality products produced, process and delivered in a certifiably ethical and/or environmental manner.
  15. 15. Per Capita Chocolate Consumption Consumption (in lb)1. Switzerland 22.362. Austria 20.133. Ireland 19.474. Germany 18.045. Norway 17.936. Denmark 17.667. United Kingdom 17.498. Belgium 13.169. Australia 12.9910. Sweden 12.9011. United States 11.6412. France 11.3813. Netherlands 10.5614. Finland 10.4515. Italy 6.13
  16. 16. Indian Market• 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.• As per Euromonitor study, Indian candy market is currently valued at around USD 664 million, with about 70%, or USD 461 million, in sugar confectionery and the remaining 30%, or USD 203 million, in chocolate confectionery• Cadbury is the market leader with 72% market share• The global chocolate market is worth $75 billion annually• The per capita consumption of chocolate in India is 300 gram compared with 1.9 kilograms in developed markets such as the United Kingdom
  17. 17. • Average summertime temperatures reach 43 degrees Celsius in India. Chocolate melts at body temperature of 36 degrees.• Over 70 per cent of the consumption takes place in the urban markets• Margins in the chocolate industry range between 10 and 20 per cent, depending on the price point at which the product is placed• The chocolate wafer market (Ulta Perk etc) is around 35 % of the total chocolate market and has been growing at around 13% annually
  18. 18. Drivers and Challenges• Drivers: Opportunity to expand due to low penetration, strong tradition of gifting sweets, attractive pricing driving volumes, demand from new segments, innovation through brand and product variants.• Challenges: Inflationary pressures on raw material prices, lack of government initiative, and duopolistic element of the market.
  19. 19. Stakeholders
  20. 20. • Banking and insurance services,• Packaging firms,• transport specialists.• Occasions• Users
  21. 21. Individuals Florists Families ConsumersUse as change Restaurants Other manufacturers
  22. 22. People gifting WomenChildren Individuals Men Senior Citizens
  23. 23. Working Diabetic women Women Calorie-Conscious Women Mothers Women Housewives
  24. 24. Men in the service sector CalorieConscious Diabetic Men men Men Businessmen
  25. 25. With other health issues With Senior Living alonediabetes Citizens Living with children
  26. 26. Corporate Gifting While visitingOn Occasions People Gifting friends and relatives
  27. 27. Joint Nuclear FamiliesFamilies Families
  28. 28. Bakeries and pastry shops Using Servingchocolates for Restaurants chocolates making with the bill desserts Ice cream parlours and milk shake centers
  29. 29. Manufacturers of other chocolate related products Manufacturers of Ice cream Other chocolatemanufacturers manufacturers cookies Manufacturers of products like chocolate sauce
  30. 30. By toll taxBy Shops Use as change collection points
  31. 31. Delivering chocolates with bouquets Making Making bouquetsChocolate Florists with chocolatesbouquets placed in between
  32. 32. Top 10 global confectionary companiesCompany Net Sales 2010 (US$ millions)1. Kraft Foods Inc (USA) 16,8252. Mars Inc (USA) 15,0003. Nestlé SA (Switzerland) 11,2654. Ferrero Group (Italy) 8,7635. Hershey Foods Corp (USA) 5,7036. Chocoladefabriken Lindt & Sprüngli 2,602AG (Switzerland)7. Yildiz Holding (Turkey) 2,1808. August Storck KG (Germany) 2,0009. Arcor Group (Argentina) 1,65010. Meiji Holdings (Japan) 1,599 Reference: Candy Industry, January 2011
  33. 33. Indian Players• The volume of chocolate produced in India in a year is around 30,800 tons.• The major players in the chocolate market are, Cadbury India Ltd, and Nestle India Ltd. Together these two companies constitute nearly 90% of the Chocolate Market in India. The other players are Amul Chocolates, ITC Chocolates.
  34. 34. Value Parameters• Pricing*• Offerings in every category*• Excitement*• Value for money#• Taste#• Calorific Value#• Breaking ritual (As expressed in the advertisements of Nestle Kit Kat)• Flavors and Fillings• Shelf Life• Availability• Package size*As expressed in the VISION statement of Cadbury’s India.#From Advertisements of Nestle Munch
  35. 35. Front end supply chain• Producers: farmers• Raw materials: e.g. cocoa beans, sugar, milk, wood for paper wrappers, aluminium for foil wrappers etc.;• Manufacturers: e.g. chocolate factories, sugar mills and refineries and milk processors;• Distributors: e.g. warehouses, transport companies (delivery trucks);• Retailers: e.g. retail stores, supermarkets, vending machines, etc.;• Service providers: e.g. designers, advertisers, market researchers, transport providers etc.;• Consumers: e.g. everyone, manufacturers of other chocolate products, the export market.
  36. 36. Strategy Canvas10 9 8 7 6 5 4 Cadburys 3 Nestle 2 1 Amul 0 ITC
  37. 37. Factories in india• 6 factories, 1 center for cocoa operations
  38. 38. Need Gaps according to ConsumerInsights• Lack of low-range Sugar Free chocolates• Lack of good Gifting Options• Very low penetration of online purchase• Absence of Chocolate Vending Machines
  39. 39. Need Gaps (Front End)• Very limited reach to interiors due to low melting temperature of chocolates
  40. 40. Need Gaps (Back End)• Very little Cocoa Production in India
  41. 41. Frequency of Consumption At least once a month 1% 8% 12% At least once a week30% At least once a year 48% Every day I cannot eat chocolate for 1% health reasons or allergy Very rarely
  42. 42. Favourite form of chocolates Brownies 1% 4% Candies Chocolate bars39% 37% Chocolate Cake Cookies 7% 7% Ice Cream1% Powder 4% Told you, it just needs to be chocolate
  43. 43. Type of chocolate preferred Chocolate with fillings 5% 4% 5% Chocolate with nuts 14% 31% Dark Chocolate15% Just like chocolates in any form Milk Chocolate 26% White Chocolate others
  44. 44. Least preferred type candys 1% 14% Cant pick any of31% 4% these, love them all 10% Chocolate with fillings Chocolate with nuts14% 26% Dark Chocolate Milk Chocolate White Chocolate
  45. 45. Preference37% 40% Domestic Premium Brands Imported Premium Brands Moderately Priced 23% Brands
  46. 46. Chocolates should not have Caffeine 6% Calories 9% 11%6% I LOVE everything about chocolates 27% 41% Milk Sugar The addictive flavour that makes me eat it all the time
  47. 47. Buying chocolates online 2% 5% No, and I never even 44% intend to No, but I can consider it49% Yes, all the time Yes, but very rarely
  48. 48. Sugar free Chocolates29% No Yes 71%
  49. 49. Tried sugar free chocolates I do not like the taste but will go back to it as it is 14% healthier34% I do not like the 23% taste, and will never buy it again! I like the taste and will 29% go back to it for its taste I like the taste but will still prefer the regular chocolates
  50. 50. Not tried sugar free chocolates 15% 37% Would like to try it for the calorific value Would like to try it just for the sake of it48% Would never even consider trying it
  51. 51. Guilt feeling in chocolate consumption 5% 7% Absolutely no guilt 49% Maybe a little, but no I21% dont feel guilty Slightly guilty 18% Very guilty Extremely guilty
  52. 52. Gifting Chocolates 2% 12% 18% I dont gift chocolates Very rarely36% Sometimes 32% Quite frequently All the time
  53. 53. Are exclusive chocolate shops overpriced? 3% 7%39% 18% Not at all Marginally overpriced Little overpriced Highly overpriced 33% Extremely Overpriced
  54. 54. Have you ever bought a chocolate bouquet? 15%37% No, and not even interested No, but would like to 48% Yes
  55. 55. Company while consuming chocolates 30%46% alone family 24% friends
  56. 56. Percentage of people from amongst people who feel guilty that have tried sugar free chocolates44% 56% No Yes
  57. 57. Percentage of people from amongst people who do not feel guilty that have tried sugar free chocolates22% No Yes 78%
  58. 58. People who feel guilty and haven’t tried sugar free chocolates 5%17% Would like to try it for the calorific value Would like to try it just for the sake of it 78% Would never even consider trying it
  59. 59. Thank You Tanushree Prasad

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