This document provides an overview of the chocolate industry in India. It includes chapters on research methodology, the global and Indian markets, product profiles, demand determinants, distribution channels, trends, PEST analysis, Porter's five forces model, portfolio models including BCG matrix and GE nine cell, financial analysis, opportunities and threats. Key findings are that the Indian chocolate market is growing at 15% annually, milk chocolate dominates sales, and dark chocolate shows potential for growth. The analysis identifies rising incomes, health awareness, and festive gifting traditions as driving demand.

1. Chapters
• Research Methodology
• Study of Global Market
• Study of Indian Market
• Product Profile
• Demand Determination of Chocolate Industry
• Distribution channel in chocolate industry
• Key issues & current trends
• PEST analysis
• Michel Porter’s Five Force Model
• Other Portfolio Model
• Financial Analysis
• Opportunity & Threat Analysis
• Findings
• Bibliography

2. Research Methodology
Objective
Main objective:
•To study the macro environment factors affecting chocolate industry
Sub-objective:
•To study the characteristics of chocolate industry
•To study political, economic, social and technological factors affecting chocolate industry
•To study opportunities and threats for the chocolate industry
•To find out the global trends in production, consumption, product development and Marketing
•To analyze driving forces for the chocolate industry
•To identify the porter’s five forces and its impact on chocolate industry
•To draw conclusion from the BCG Matrix
•To identify the level of competition between different players in chocolate industry
•To find out the key success factor in chocolate industry
•To analyze the value chain of chocolate industry

3. Cont…
Research design Exploratory
Data collection & sources Secondary data
Analysis plan
• PEST Analysis
• Michel Porter’s Five Force Model
• BCG Matrix
• Strategic Group Mapping
• GE Nine-Cell
• Driving Forces
• Key Success Factors
• Value Chain Analysis
Limitations
• The whole study is based on secondary data
• It is assumed that whole data is authenticated and on that basis conclusion is derived. So
it is may possible it is not in proper manner
• The level of reliability may be less as it is based on secondary data
• Financial data of some companies were not available at the time of the study

4. Study of Global Market
Market size
Global chocolate market will grow to $98.3
billion in 2016 from the 85 billion it was at in
2013
CAGR
21%
12% 11%
9%
8%
7%
4%
0%
5%
10%
15%
20%
25%
India Latin
America
Brazil China Russia Eastern
Europe
Mexico
Compound Annual Growth Rate
Per Capita Chocolate Consumption, by
country (2014)
Country Per Capita Consumption (Kg)
Switzerland 9
Germany 7.9
Austria 7.8
Ireland 7.5
United Kingdom 7.5
Norway 6.6
Estonia 6
Slovakia 5.4
Sweden 5.4
Kazakhstan 5.3
• India - about 120 gm in 2013

5. Cont…
Segment of the chocolate industry
The market is segmented into various products such as,
 Dark chocolate
 Milk chocolate
 White chocolate
Additionally, the market is segmented based on sales frequency such as
 Daily chocolate
 Premium chocolate
 Seasonal chocolate

6. Cont…
Main manufacturers of chocolate in the world
Company
Net Sales 2013 (US$
millions)
Mars Inc (USA) 17,640
Mondelēz International Inc (USA) 14,862
Nestlé SA (Switzerland) 11,760
Meiji Holdings Co Ltd (Japan) 11,742
Ferrero Group (Italy) 10,900
Hershey Foods Corp (USA) 7,043
Innovation
•Personalizing chocolate
•The 3D printing revolution

7. Cont…
Cocoa suppliers
Major cocoa producing countries in each region include:
Africa: Côte d’Ivoire, Ghana, Nigeria, Cameroon
Asia/Oceania : Indonesia, Malaysia, Papua New Guinea
Americas : Brazil, Ecuador, Colombia
Africa
68%
Americas
15%
Asia
17%
Global Cocoa Production
www.worldcocoa.org

8. Study of Indian Market
India's chocolate market is estimated at around Rs 3,000 crore
The overall chocolate market is growing 15% a year
According to India Chocolate Market Forecast & Opportunities,
2018, the per capita consumption of chocolates is increasing in
the country which will continue to flourish the market revenues
Continuous rise in per capita income, changing consumer
preferences and growing gifting tradition are boosting chocolate
consumption in India
Consumer preferences in India have gradually transitioned from
traditional sweets to chocolates over the last couple of decades

9. Cont…
Market share of major players
Mondelez
India
62%Nestle,18%
Mars, 6%
Ferrero,3%
Amul, 3%
Others, 8%
India Chocolate Market Share. Source: ValueNotes
India’s chocolate sales (2008-2018)

10. Product Profile
Chocolate is a sweet that is thousands of years old, which today is made of the mass
of cocoa beans and cocoa butter obtained by processing roasted cocoa beans and
powdered sugar, in the case of milk chocolate, milk raw material is added to the
ingredients.
Ingredients
Chocolate Liquor
Chocolate
Lecithin
Sugar
Cocoa Butter
Vanilla, Fruits, Nuts

11. Cont…
Types of chocolate Share of milk, white and dark
chocolate in total sales of chocolate
Milk
75%
White
16%
Dark
9%
Milk chocolate is currently the
most popular category in
India, contributing to 75% of
the total sales of chocolates.
Cadbury dairy milk is the
market leader in the milk
chocolate segment
Dark chocolate, with only a
9% share of the market, is
expected to be the fastest
growing segment due to its
health benefits and increasing
awareness among Indian
consumers

12. Cont…
Manufacturing process of chocolate

13. Demand Determination of Chocolate
Industry
Price
Year Price (gift boxes) Demand (US dollar billion)
2009 55 0.5
2010 90 0.7
2011 110 0.9
2012 160 1.2
2013 320 1.5
Income of targeted customers
Year Per capita income (US dollar) Demand (US dollar billion)
2009 885 0.5
2010 948 0.7
2011 1032 0.9
2012 1086 1.2
2013 1123 1.5
Penetration level

14. Distribution channel in chocolate industry
Producer
Wholesaler
Retailer
Consumer

15. Key issues & current trends
Key issues
• Child Labor and Slavery in the Chocolate Industry
• Rise in price of raw material
Current trends
• Demand for Dark Chocolates
• Consumption of chocolates
• Occasion and celebration
• Packaging
• Premium chocolates

16. PEST Analysis
Political factor
Increasing price of cocoa
2200
2431
2825
3223
0
500
1000
1500
2000
2500
3000
3500
2011 2012 2013 2014
US Dollars Per Metric Ton
Source:indexmundi.com

17. Cont…
Increasing price of hazelnut
Cold chain facility
Mandatory Labeling & other FSSAI norms
Encouragement to private sector
Relaxed FDI norms
Incentives for development of storage facilities

18. Cont…
Conclusion
Factors Favorable Unfavorable
Increasing price of cocoa √
Increasing price of hazelnut √
Cold chain facility √
FSSAI norms √
Encouragement to private sector √
Relaxed FDI norms √
Incentives for development of storage
facilities
√

19. Cont…
Economical factor
10.26%
6.64%
4.74% 5.02%
5.63%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2010 2011 2012 2013 2014*
GDP growth rate
948
1032
1086 1123 1165
0
200
400
600
800
1000
1200
1400
2010 2011 2012 2013 2014
Per Capita Income (US dollar)
Source: tradingecocomics.com

20. Cont…
11.99
8.86
10.25
9.65
8.28
0
2
4
6
8
10
12
14
2010 2011 2012 2013 2014
Inflation Rate (%)
Source: statista.com
10
9.8
8.5
8.8
8
8
9
9
10
10
11
2010 2011 2012 2013
Unemployment Rate (%)
Source: statista.com

21. Cont…
Conclusion
Factors Favorable Unfavorable
Gross domestic product √
Per capita income √
Inflation rate √
Unemployment trends √
Socio-cultural factor
Factors Favorable Unfavorable
Age distribution √
Culture √
Eating habits √
Health consciousness √
Technological factor
Personalizing chocolate and the
3D printing revolution are the
technological changes in
chocolate industry

22. Michel Porter’s Five Force Model
Intensity of rivalry among competitors in an industry
Parameters Description
Very High
(1)
High
(2)
Medium
(3)
Low
(4)
Very Low
(5)
Number of
players
More √
Market growth
rate
High √
Rivals become
equal in size
Yes √
Switching cost of
buyers
Low √
Frequent &
aggressive
moves
Yes √

23. Cont…
Threat of new entrants
Parameters Description
Very High
(1)
High
(2)
Medium
(3)
Low
(4)
Very Low
(5)
Existing players struggling to earn
good profit
Profit margin is good √
Industry outlook is risky Good future √
Industry growth rate High √
Economies of scale Required √
Access to distribution channel Easy √
Access to raw material Difficult √
Capital requirement High √
Switching cost of buyers Low √
Customer loyalty Low √

24. Cont…
Threat of substitute products
Parameters Description
Very High
(1)
High
(2)
Medium
(3)
Low
(4)
Very Low
(5)
Availability of
substitute
product
Easily available √
Price of
substitute
product
Low √
Switching
cost
Low √

25. Cont…
Bargaining power of suppliers (cocoa)
Parameters Description
Very High
(1)
High
(2)
Medium
(3)
Low
(4)
Very Low
(5)
Number of
suppliers
Few √
Price of raw
material
High √
Substitute of
raw material
available
No √
Suppliers are
scattered or
concentrated
Concentrated √

26. Cont…
Bargaining power of suppliers (Milk powder)
Parameters Description
Very High
(1)
High
(2)
Medium
(3)
Low
(4)
Very Low
(5)
Number of
suppliers
More √
Price of raw
material
Low √
Substitute of
raw material
available
No √
Suppliers are
scattered or
concentrated
Scattered √

27. Cont…
Bargaining power of buyers
Parameters Description
Very High
(1)
High
(2)
Medium
(3)
Low
(4)
Very Low
(5)
Number of
buyers
Many √
Buyers are
well informed
Yes √
Buyers are
scattered or
concentrated
Scattered √
Buyers are
loyal
No √

28. Cont…
Conclusion
Rivalry among competitors Very High
Threat of new entrants Medium
Threat of substitute products Very High
Bargaining power of suppliers High
Bargaining power of buyers Low
Competitive
Rivalry
Threat of
new
entry
Buyer powerSupplier
power
Threatof
substitut
e

29. Other Portfolio Model
BCG Matrix
GE Nine cell matrix
Strategic Group Mapping
Driving force
Key Success Factor
Value Chain Analysis

30. BCG Matrix
Company
Name
Market
Share (%)
Relative Market
Share (%)
Mondelez India 62 1
Nestle 18 0.29
Mars 6 0.1
Ferreo 3 0.05
Amul 3 0.05

31. GE Nine cell matrix
Industry Attractiveness
Factors Weight Rating* Industry Atrractiveness Score
Political factor 0.04 6 0.24
Economic factor 0.05 8 0.4
Social factor 0.06 8 0.48
Intensity of competition 0.20 5 1
Market Size 0.15 7 1.05
Projected Growth Rate 0.25 9 2.25
Seasonal influence 0.15 9 1.35
Opportunities 0.06 7 0.42
Threats 0.04 5 0.2
Weighted industry attractiveness
scores
1 7.39
*Rating Scale: 1 = very unattractive , 10 = very attractive

32. Cont…
Competitive Strength
Factor Weight Rating* Competitive Strengths
Mondelez Nestle Mars Ferrero Amul Mondelez Nestle Mars Ferrero Amul
Relative market
share
0.15 9 7 6 5 5 0.9 0.7 0.6 0.5 0.5
Brand image &
reputation
0.15 8 7 6 6 9 1.2 1.05 0.9 0.9 1.35
Advetisement 0.10 9 6 5 5 8 0.45 0.3 0.25 0.25 0.4
Packaging 0.20 8 8 7 8 6 1.6 1.6 1.4 1.6 1.2
Product
innovation
0.15 6 6 5 6 4 0.9 0.9 0.75 0.9 0.6
Geographical
coverage
0.10 9 8 9 9 8 0.9 0.8 0.9 0.9 0.8
Different product
line
0.15 7 8 4 5 9 1.05 1.2 0.6 0.75 1.35
Weighted
competitive
strength score
1 7 6.55 5.4 5.8 6.2
*RatingScale:1=veryweak,10=verystrong

33. Cont…
Company Symbol
Mondelez India A
Nestle B
Mars C
Ferrero D
Amul E
A E D CB

34. Strategic Group Mapping
We have made the group mapping of five companies which are listed as below:
Mondelez India
Nestle
Mars
Amul
Lotus
We have selected two variables - Price and Number of brands. Price and number of brands
both are divided into three categories which is as per the below table
Price Number of brands
Low 0-10 Less than 7
Medium 10-20 7-9
High More than 20 More than 9

35. Cont…
Company Symbol
Mondelez India
Nestle
Mars
Amul
Lotus

36. Driving forces
Festivals
Change in who buys the chocolates
Change in long-term industry growth rate
Technological changes
Product innovation
Key Success Factor
Tradition of gifting sweets in India
Shift in consumer preference from traditional mithai to chocolates
Rising income levels
Attractive packing i.e. marketing innovation
Pricing which is suitable to every pocket

37. Value Chain Analysis
Production Marketing
Crop
Harvest
Ferment, dry
Trading
Storage,
transport
Processing
Roasting
Grinding
Pressing
Chocolate
Mfg.
Consumer
Distribution
PrimaryActivitiesSupportActivities
Research & development
Human resource management
Technical assistance
General administration

38. Financial Analysis
10.42
17.77
-3.39-5
0
5
10
15
20
Mondelez India Nestle Lotus
Gross Profit Margin
8.71
21.39
-2.29-5
0
5
10
15
20
25
Mondelez India Nestle Lotus
Operating Profit Margin

39. Cont…
7.1
12.16
-3.26
-6
-4
-2
0
2
4
6
8
10
12
14
Mondelez India Nestle Lotus
Net Profit Margin
8.96
15.6
-2.2-4
-2
0
2
4
6
8
10
12
14
16
18
Mondelez India Nestle Lotus
Cash Profit Margin

40. Cont…
31.61
47.79
-6.83
-10
0
10
20
30
40
50
60
Mondelez India Nestle Lotus
Return on Capital Employed
25.93
47.16
16.4
0
10
20
30
40
50
Mondelez India Nestle Lotus
Return on Equity
11.7
245.68
-7.28
-50
0
50
100
150
200
250
300
Mondelez India Nestle Lotus
Return on Total Assets

41. Opportunity & Threat Analysis
Opportunities
• Increasing gifting
culture
• Increasing health
consciousness
• Increase reach in rural
market
• Acquire competition
• Diversification of
product range
Threats
• Increase in cost of raw
material
• Availability of substitute
product
• Low switching cost

42. Findings
Per capita consumption of chocolates in India has grown from 40 grams in 2008 to
120 grams in 2013
Mondelez India (Cadbury) is the market leader with 62% market share ,followed by
Nestle with 22% market share
Switzerland is the country with highest chocolate consumption
Cocoa price is continuously increasing
Urban cities account for nearly 80% of the consumption of chocolates
Future outlook of chocolate industry is good
Chocolate sales is continuously increasing for the last five years
Cadbury Glow has launched a unique gifting website that connect both the gifter and
recipient. Customers can add a personal touch to their gift of Cadbury Glow by writing
a personal note, sending a lovely song or experiencing again fond memories by
videos and photos
Personalizing chocolate and the 3D printing revolution are the technological changes
in chocolate industry

43. Cont…
Dark chocolate is expected to be the fastest growing segment due to its health
benefits and increasing awareness among Indian consumers
Political, economic, social and technological factors are favorable for chocolate
industry
Rivalry among competitors, threat of substitute product and bargaining power of
supplier is very high
Threat of new entry is medium and bargaining power of buyer is low
After analyzing GE nine cell matrix we come to know about that all the companies fall
in the high priority area
Cadbury has more than nine brand and offers chocolate in all the price range
Within Nestle and Lotus there is more competition having 7-9 brands
Mars and Amul are close competitor

44. Cont…
Driving forces in the chocolate industry includes festivals & occasions, changes in
who buys the product, change in long term industry growth rate, technological
changes & product innovation
Key success factors in chocolate industry are shift in consumer preference from
traditional mithai to chocolates rising income levels, attractive packing, pricing which
is suitable to every pocket
Mondelez India foods ltd. cocoa department produces over latest million hybrid
seedlings annually and distributes among farmers in Kerala, Andhra, Tamilnadu and
Karnataka

45. Bibliography
Book
“Crafting and Executing Strategy” by A Thompson, Margaret A Peteraf, John E Gamble, A J
Strickland, A K Jain, Tata McGraw Hill Education Pvt. Ltd., Eighteenth Edition”
Websites
• www.confectionerynews.com
• www.indianmirror.com
• www.strategicmanagementinsight.com
• www.livemint.com
• www.moneycontrol.com
• www.ibef.org
• www.statista.com
• www.bloomberg.com
• www.kpmg.com
• www.worldcocoa.org
• www.myaccountingcourse.com
• www.readyratio.com
• www.indiaretailing.com
• www.indexmundi.com