Market Research Report : Confectionery market in india 2012


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The confectionery market in India is expected to witness a steady demand growth in spite of the ‘indulgence product’ tag, according to, knowledge consulting solutions company, Netscribes Inc. The report identifies trends in the confectionery industry such as the growing gifting culture and the use of confectionery products as a replacement of traditional sweets. Moreover, the rural market is also a major contributor to the industry due to its massive demand and consumption in terms of volume. This is further aided by the penetration and availability of confectioneries at different price points along with the increased disposable income amongst consumers. All these factors indicate a bright future of the confectionery market in India, according to the report.

Netscribes launches a report on the Confectionery Market in India 2012 as part of Netscribes’ Food and Beverage Industry report series.

The introduction of the report segregates the overall FMCG market into its sub segments, which includes food and beverage, under which the sub segment, the confectionery market, is highlighted. This is followed by the overview section that provides an overview of the confectionery market in India, its key characteristics, market size and growth rates as well as market potential. A segmental share of the market in terms of organized and unorganized sector is also provided along with zone wise and age wise segmentations. In addition to this, price wise and variant wise segmentation of the lower price bracket confectioneries has also been provided. The next section elaborates on the value chain analysis of the sector, followed by general distribution system of the confectionery products along with the profit margins at each step.

The report then goes on to highlight the various aspects of the confectionery market by segregating it on the basis of product types i.e. sugar confectionery, chocolate confectionery and chewing gums. It contains a brief overview about each category along with their respective market sizes. Information on the chocolate companies, the boiled sugar candy market and other aspects of the market in terms of products are provided in the exclusive report.

Following the segmentation in terms of product types, the Netscribes’ report shows a segmentation of the market into rural market and urban markets. A brief overview regarding each segment along with flavour preferences and advertising techniques have also been included.

This is followed by a zone wise consumer preference section, which includes flavour and price preferences of consumers inhabiting the four regions of the country – East, West, North and South.

A separate section on import and export of different types of confectionery products has also been provided, highlighting the growth in import-export values ov

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Market Research Report : Confectionery market in india 2012

  1. 1. Insert Cover Image using Slide Master View Do not distortConfectionery Market – IndiaNovember 2012
  2. 2. Executive Summary  The Indian confectionery market is pegged at INR x bn for the year 20__ and is expected to grow  Market at a CAGR of y% 20__ onwards Drivers Challenges —Growing Gifting Culture —Rise in Ingredient Price —Low Per Capita Consumption of Confectionery —Rise in Packaging Costs Drivers &  —Rapid Urbanization —Regulatory Challenges Challenges —Growing Retail Market —Fake Confectioneries. —Growing Income and Consumption —Developing Rural Sector —Marketing Campaigns  Events  Functional Confectioneries  Packing Variations Trends  New Launches  Innovation in Products  Creative Advertising  Corporate Activities. Major PlayersCompetition Company A Company B. Company C  Company D  Company E  Company F CONFECTIONERY MARKET IN INDIA 2012.PPT 2
  3. 3. LE   •Introduction MP •Market Overview •Market Segmentation – Product WiseS A •Market Segmentation – Rural & Urban •Consumer Preference •Import‐Export •Drivers & Challenges •Government Rules & Policies  •Trends •Competition •Strategic Recommendations •Appendix CONFECTIONERY MARKET IN INDIA 2012.PPT 3
  4. 4. Food and beverage ‐ the broad category within the FMCG sector, is further segmented into multiple categories LE   Market Segmentation MP FMCG S A Personal Care Health Care Home Care Food & Beverage Fruits and  Meat, Fish  Packaged  Dairy Staples Beverages Vegetables and Poultry Foods Soup, Pasta, Confectionery Ice Cream Baked Products Ready to Eat Others Noodles • The Food and Beverage sector is further segmented into multiple categories and confectioneries come  under the category of packaged foods • Among the other sub categories under packaged foods, confectionery, soup, noodles, ice cream and ready  to eat segments account for the fastest growing sub categories CONFECTIONERY MARKET IN INDIA 2012.PPT 4
  5. 5. The Indian confectionery market is highly competitive in nature and will witness…Indian Market – Overview (1/4) • In general term, confectionery refers to any food item which has high sugar content • Sweet tasting food products enjoy huge popularity among the Indian consumers, which is also  responsible for making confectionery products one of the fastest growing sectors under the packaged  food segment • It is chiefly a mono pack market in comparison to the global market which is highly dominated by multi  packs • Moreover, here sales and distribution of majority of the low price products are heavily dependent on the  unorganized retail which includes small retails shops, paan‐bidi shops and kirana outlets, in addiiton to    the organized retails for the sale of premium products E • The market size of Indian confectionery market has been estimated to be around INR x bn for the year  20__ L MP Confectionery – Market Size & Growth SA INR bn 200,000 Y2% Y1% x8 x9 150,000 x6 x7 x4 x5 100,000 x2 x3 x1 50,000 0 20__ 20__ 20__ 20__ 20__ 20__ 20__ 20__ 20__ CONFECTIONERY MARKET IN INDIA 2012.PPT 5
  6. 6. …robust growth in the coming yearsIndian Market – Overview (2/4) • The market is highly competitive in nature and is  segmented into organized and unorganized sector,  wherein organized sector accounts for y3% of the overall  LE   Zone wise segmentation of the  confectionery market, wherein southern  P part accounts for the biggest share market M  The organized market is mostly dominated by the multinational  companies, but several domestic players are also present and  A are strengthening their position in the market  S • Moreover, to overcome the huge competition existing in  the market, the players are trying to lure the consumers  by attractive pricing, customization of products in  A3% A4% A1% South West North accordance with Indian taste preferences, brand building  A2% East activities such as advertising, contests etc among others The market is highly  dominated by the  unorganized sector • The Indian market is witnessing surging demand of  B1% confectionery products due to growing income,  changing mindset and rising consumption by the adult  segment as well as more and more foreign players are  Organized B2% investing to build up business over here Unorganized CONFECTIONERY MARKET IN INDIA 2012.PPT 6
  7. 7. The confectionery industry can also be classified in terms of the different product categoriesProduct Segmentation (1/4) Three broad categories of the confectionery market LE   P Sugar Confectionery Chocolate Confectionery Chewing Gum S AM C4% In the overall confectionery market,  C3% Sugar confectionery sugar confectionery accounts for the  major share of around c1%, followed  C1% Chocolate confectionery by chocolate confectionery (c2%) and  Chewing gum chewing gum (c3%) Others C2% Note: Others include breath fresheners, jellies, mints etc. CONFECTIONERY MARKET IN INDIA 2012.PPT 7
  8. 8. The Indian Confectionery Market can be further segmented into rural market and urban marketSegmentation – Rural and Urban (1/3) LE   Indian Confectionery Market MP S A Rural Market Urban Market • But, there exists some differences  The demand from the rural market is  between the rural and the urban  at par with the urban market,  consumers in terms of tastes and  wherein rural market accounts for  preferences around d1% of the overall  D1% D2% confectionery consumption • Moreover different companies also  apply different types of promotional  strategies to attract the consumers  from the respective segments Rural Consumption Urban Consumption CONFECTIONERY MARKET IN INDIA 2012.PPT 8
  9. 9. Confectionery Market ‐ India  Confectionery Flavour Preference  • xx • xx P LE S AM• xx • xx CONFECTIONERY MARKET IN INDIA 2012.PPT 9
  10. 10. Import of different types of confectionery products (1/4)Chewing Gum Major Importing Nations (2011) Volume Value A INR mn ‘000 units B a1 P6% 100 1,500 P5% C 80 P3% P4% D a2 1,000 P1%   60 a3 a4 E b1 LE 40 F b2 500 P2% 20 b3 b4 0 20__ MPSugar Confectionery 20__ 20__ 20__ 0 Major Importing Nations (2011)1,000 INR mn S A Volume Value d4 ‘000 units 8,000 A1% P Q R 800 d3 A6% T 6,000 d2 AUSTRALIA 600 d1 c4 4,000 400 A2% UOTHERS c3 A5% 200 c2 2,000 c1 A4% A3% 0 0 20__ 20__ 20__ 20__Note: HS Code 170410 (Chewing gum, whether or not sugar coated ), HS Code 170490 (Sugar confectionery including chocolates, no cocoa, nesoi) CONFECTIONERY MARKET IN INDIA 2012.PPT 10
  11. 11. Drivers & Challenges – Summary  Drivers Growing Gifting Culture Challenges Low Per Capita Consumption Of  Confectionery LE   Rise in Ingredient Price P Rapid Urbanization Rise in Packaging Costs Growing Retail Market Growing Income and Consumption S AM Regulatory Challenges Fake Confectioneries Developing Rural Sector Marketing Campaigns CONFECTIONERY MARKET IN INDIA 2012.PPT 11
  12. 12. Trends – Summary  Events LE   MP Functional Confectioneries  S A Packing Variations Key Trends ` New Launches  Innovation in Products Creative Advertising  Corporate Activities CONFECTIONERY MARKET IN INDIA 2012.PPT 12
  13. 13. Public: Foreign Company – Company A (1/4)Company Information L Company A, Street A E   Offices and Centres – India  MPCorporate Address City B State C ATel No. 91 124 7239 S City BFax No. 91 124 4734111Website of Incorporation 1767Ticker Symbol 123456Stock Exchange ABC Head OfficeProducts and ServicesCategory Products/Services Eclairs, Polo, Milky Bar, Milk  Key PeopleConfectionery Chocolate,Munch, Barone,  Kitkat,Selections, Dark Chocolate Name Designation Nescafé classic, cappuccino,  sunrise  Person A MD, CEOBeverages premium,  sunrise and nestea iced tea Person B. DirectorPrepared Dishes &  Maggi noodles, pazzta, atta noodles, Cooking Aids coconut milk powder, sauces Person C DirectorMilk Products &  Cerelac, NAN, lactogen, acti‐plus,  Person D DirectorNutrition neslac, junior daheez, milkmaid CONFECTIONERY MARKET IN INDIA 2012.PPT 13
  14. 14. Public: Domestic Company – Company A (2/4) Financial Snapshot Total Income LE   Key Ratios Particulars  y‐o‐y change  (2011‐10) 2011 2010 2009 2008 P Net Profit / Loss INR bn INR bn  Profitability Ratios x4 Operating Margin M300 x3 40 x2 Net Margin A200 x1 Profit Before Tax Margin y4 20 S y3 Return on Equity100 y1 y2 Return on Capital Employed 0 0 Return on Working Capital 20__ 20__ 20__ 20__ Return on Assets Financial Summary  Return on Fixed Assets Cost Ratios• The company earned a net profit of INR x4 bn in FY 20__, as  Operating costs (% of Sales) compared to net profit of INR x3 bn in FY 20__ Administration costs (% of • The company reported total income of INR y4 bn in FY 20__,  Sales) registering an increase of z per cent over FY 20__ Interest costs (% of Sales) Liquidity Ratios• The company earned an operating margin of a1 per cent in FY 20__,  Current Ratio a decrease of z1 percentage points over FY 20__ Cash Ratio• The company reported debt to equity ratio of a2 in FY 2011, a  Leverage Ratios decrease of z2 per cent over FY 20__ Debt to Equity Ratio Debt to Capital Ratio Key Financial Performance Indicators Interest Coverage Ratio Indicators Value (dd/mm/yyyy) Efficiency Ratios Market Capitalization (INR mn) u Fixed Asset Turnover Asset Turnover Total Enterprise Value (INR mn) v Current Asset Turnover EPS (INR) w Working Capital Turnover PE Ratio (Absolute) x Capital Employed Turnover Improved Decline CONFECTIONERY MARKET IN INDIA 2012.PPT 14
  15. 15. Public: Foreign Company – Company A (3/4)Key Business Segments A LE   Key Geographic Segments B P100% 100%80% 80%60%40%20% S AM 100% Food is the key business  segment on which the  company has been focusing  for the last four years 60% 40% 20% 100% India is the only geographic  segment in which the  company has been operating  for the last four years 0% 0% 2011 2011Business HighlightsDescription  News • Company A operates as a subsidiary of A Ltd.Overview • The company deals with food business which comprises of milk and nutrition products,  beverages, prepared dishes, chocolate and confectionaries • It  has 7 manufacturing facilities located in Moga (Punjab), Choladi (Tamil Nadu), Manufacturing facilities Nanjangud (Karnataka), Samalkha (Haryana), Ponda and Bicholim (Goa) and Pantnagar (Uttarakhand) CONFECTIONERY MARKET IN INDIA 2012.PPT 15
  16. 16. Public: Foreign Company – Nestle India Ltd. (4/4)Description  News • In 2012, the company will add another factory at Tahliwal (Himachal Pradesh) • The company is going for extension of its existing plant at Ponda in Goa to enhance    productivity of popular brands which include Kitkat and MunchInvestment LE • For this, a part of the INR 7 bn fund that has been invested by the company in the state  for the past three years will be used MP S A CONFECTIONERY MARKET IN INDIA 2012.PPT 16
  17. 17. AppendixRatio Calculations Ratio Calculations (Operating  Current Assets / Current Operating Margin Current Ratio Income/Revenues)*100 Liabilities Net Margin (Net Profit / Revenues) *100 {(Cash & Bank Balance +  Cash Ratio Marketable Securities) / Current  (Income Before Tax / Revenues  Liabilities)} Profit Before Tax Margin *100  Total Liabilities / Shareholders  Debt to Equity  (Net Income / Shareholders  Equity Return on Equity (ROE)  Equity)*100  {Total Debt / (Shareholders  Debt to Capital Ratio EBIT / (Total Assets – Current  Equity + Total Debt)} Return on Capital (ROCE)  Liabilities)*100  Interest Coverage Ratio EBIT / Interest Expense (Net Income / Working Capital) Return on Working Capital *100 Fixed Asset Turnover Sales / Fixed Assets Return on Assets (Net Income / Total Assets)*100  Asset Turnover Sales / Total Assets Return on Fixed Assets (Net Income / Fixed Assets) *100  (Operating Expenses / Sales)  Current Asset Turnover  Sales / Current Assets Operating Costs (% of Sales) *100 Administration Costs (% of  (Administrative Expenses / Sales)  Working Capital Turnover Sales / Working Capital Sales) *100  Capital Employed Turnover  Sales / Shareholders Equity Interest Costs (% of Sales) (Interest Expenses / Sales) *100  CONFECTIONERY MARKET IN INDIA 2012.PPT 17
  18. 18. Sources of Information Secondary Research Primary Research Print Medium InterviewsLeading Newspapers Leading Industry VendorsJournals / Magazines Industry StakeholdersBusiness Magazines Industry Experts  Electronic Medium Surveys Conducted in Social / Technology Focused  ForumsCompany WebsitesGovernment Websites / ResourcesOnline MagazinesOnline Journals / ArticlesPremium DatabasesSocial Networking Space CONFECTIONERY MARKET IN INDIA 2012.PPT 18
  19. 19. Thank you for the attentionThe Confectionery Market – India report is part of Netscribes’ Food and Beverage Series. For the complete market research report, contact us at:Phone: +91 33 4027 6214/15E‐Mail: info@netscribes.comFollow us on:About Netscribes, Inc.Netscribes, Inc. is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business 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, Inc. 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 in the preparation, “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior permission is required for guidelines on reproduction. CONFECTIONERY MARKET IN INDIA 2012.PPT 19