Can jaggery compete with sugar in India? Many developing countries are rationing the usage of sugar and have introduced 'sugar tax' on beverage companies to curb the over consumption. The shift has driven the interest in alternative sweeteners, especially Jaggery. On the consumer side, people are looking for something more than an 'empty sweetener'. Jaggery has been perceived to have multi-faceted benefits. From strengthening nervous system to maintaining acid balance of body, jaggery is known to control blood pressure, prevent smoke induced lung lesions, bile disorders and rheumatic afflictions. With increasing trend in people dying of obesity, heart and lung disorders which are mostly lifestyle induced, people are getting conscious about their health. Therefore, a brand must provide the subsitute for empty sugar. It also needs a lot of habit building exercises to be a regular pick. So, we decided to do a primary research and understand the factors that drive jaggery purchase in Indian households.

1. What’s in this report?
Jaggery market trends Market dynamics Industry overview
Value chain issues Consumer perception Need for market position

2. The global market is expected to grow at 6% by 2023 & shows decent domestic demand trend
Demand for alternative caloric sweeteners is expected to
grow as countries with high sugar consumption levels are
getting aware of health risks associated with sugar. Many
developed and developing countries have come up with
sugar tax to curb the usage of sugar in soft drinks, thereby
influencing the lookout for ‘sustainable alternatives.’
[Sources: Agriexchange.apeda.gov.in]

3. The dynamics of the Indian Jaggery market

4. Traders and Commission agents rule the ecosystem but also bear a high risk
Market functionaries
Local
merchant/producer
Itinerant merchants
Commission agents Traders
Weighman Hamal
Procurers
Warehouse
facilitators
Processors
Surveyors
Dependenceontrader
Marketplaces
Weekly market
Wholesale market
Primary
market
Secondary
market
Terminal
market
Market Yard
Selling mechanism
Method Decision maker
Forward selling
Producer – Trader
negotiation
Anubhav Sale
Payment period set
by seller
Hatta Sale (secret
sale)
Commission
agents/traders
Sale by sample Mutual process
Bulk sales Mutual process
Open agreement No intermediary
Open auction
system
Market demand
drives highest bid
Tender system
Market driven,
facilitated by
committee

5. It’s a red ocean market for the conventional Gur (Jaggery) manufacturers
Low capital
requirement
Fierce competition
Less technical
knowledge required
Abundance of
unskilled labour
Little or no united
association
Innumerable
choices for buyers
Habit based
substitutes
Substitutes well
positioned
Low adoption rate
of jaggery
Superior market
share of substitutes
Substitutes have
low chances of
perishing
Adequate suppliers
Non differentiated
product offering

6. The devil is in the value chain
Firm scenario: No R&D assistance, volatile jaggery pricing, unpredictable labour cost, unpredictable
cycles of account receivables, high commission charges, high interest rates on credit
Human resource scenario: Semi – skilled artisans, lack of training program
Technology conditions: Locally made equipment, low fuel efficiency, improper storage conditions
leading to reduced shelf life, non – standardized clarification process
Procurement constraints: High producer – intermediary gaps, high transportation costs, lack of storage
facility, poor credit cycle, high raw material prices
Inbound logistics
• Characterized by high
levels of transportation
cost for intermediaries
• Presence of commission
agents to bridge the gap
• Distant distribution
facilities
Operations
• Producers’ benefits
largely determined by the
channel players, proximity
to intermediaries
• Unplanned inventory
• Non standardized
manufacturing
• Non standardized grading
process
Outbound logistics
• Heavily dependent on
third party transportation to
reach market places
• Information mismatch in
order processing
• Processors & warehouse
facilitators influence the
chances of perishing
Marketing & Sales
• Direct marketing
• Trader/Commission agent
driven pricing
• Distress sales
• Faulty minimum price
support scheme
Marginal
Profitability

7. What’s the buzz about Gur in the
local market?

8. The dataset
Data Collection: Online
form based survey
Respondents: 400 Male : Female 52:48
Dominant age range: 18
to 29 yr
The objective was to identify the trends in buying cycle and also understand the factors which drive the
purchase of jaggery.

9. Gur is undoubtedly popular but is that enough?
93%of the respondents have heard of Gur (jaggery)
89%of the respondents find it healthy
11%of the respondents who find it
healthy use it
68%of the respondents use
sugar despite considering Gur
to be healthier
Got you wondering too?
But, 57% of the
respondents are
occassional users!

10. Is it too good to be ‘Gur’?
55% of the respondents
look for taste based
segments while 45% of
the respondents purchase
for the health benefits
Lack of established brand
60% of the respondents
look for branded items
during purchase
Improper packaging & labeling
54% of the respondents
look for nutritional facts,
quality certifications
Scattered distribution
62% of the respondents
claim to purchase Gur at
local ‘kirana’ store but
unavailability triggers them
to choose sugar
Lack of product positioning
Lowlevelsofjaggeryusage

11. Taste and colour seem to be the clear determinants in the buying decision
Product differentiation in terms of taste based variations could be an influential factor.

12. About 20% of Indian adults were obese as of 2016…

13. …and young India might replace sugar based products with jaggery based ones
Also, the common perception among 89% of the respondents is that Gur is healthy and lack of proper branded
products is the major cause behind sugar consumption. The ‘health’ focused market position could be pivotal.

14. Standardized variants of quality checked & packaged jaggery at the right place could do the trick…

15. It is recommended that…
Manufacturing
• Multi-stage quality assurance must be ensured from extraction process to packaging
• Usage of organic clarifiers can reduce scum levels and also improve colour.
• Vertical/Horizontal roller crusher could improve extraction efficiency.
• Usage of IISR, Lucknow recommended 2 and 3 pan furnace can improve yield and also enhance processing time
5 – step Quality check
• Ensuring decent pH level and total suspended solid level are recommended
• Standardized method of juice extraction must be adhered
• Higher sucrose in TSS ensures purity
• Clarity of juice must be an indicator of good quality
• Carmelization, crystallization and addition of additives must be prevented to attain standardization
Storage & shelf life enhancement
• Low density polyehtylene film would ensure moist free storage
• IISR recommended storage cans can reduce threat of damage from moisture during summer
• Modified atmospheric packaging, PET packaging can boost shelf life

16. Thank you. Send in your queries incase you want to tap this market.
Contributors
Durbar Dasgupta
PGDM 2020
Shilpy Yadav
PGDM 2020
Praveen Kumar
PGDM 2020