A research by Mintel claims that India’s love of chocolate, the fastest growing market globally, expanded in volume sales with 21% growth between 2008 and 2011. The report adds that chocolate consumption in India has almost doubled since 2008, with sales of chocolate increasing from $418 million in 2008 to $857 million in 2011. While domestic consumption in India is currently low when compared with other mature markets, such as Germany at 8 Kg per head, or the United Kingdom and France at 6 Kg respectively, there is huge potential for the Indian chocolate market to to grow even further.
Deepa Dsouza, Trend and Innovation Consultant - India at Mintel, said: “Chocolate consumption in India has seen an incredible growth rate in the past few years, especially in urban and semi-urban areas. Until few years ago, chocolate confectionery was considered a premium in comparison to sugar and gum confectionery, but major players in the market have found channels to manufacture and distribute their products at more affordable prices than before." Volume, cites Mintel’s research, has grown strongly too to reach 88,000 tonnes in 2011, up from 50,000 tonnes in 2008. This equates to a per capita consumption of 70 grams in 2011, up from 40 grams in 2008.
Indian chocolate confectionery continues to thrive as against the more mature chocolate markets across Europe that are witnessing a slowdown. In Germany volume consumption declined from 770,000 tonnes in 2008 to 700,000 tonnes in 2011, and in the UK it went from 362,000 tonnes in 2008 to 350, 000 tonnes in 2011.
| Volume sales for chocolate in India grew 21% between 2008 & 2011 |
| Sales of chocolate increased from $418 mn in 2008 to $857 mn in 2011 |
| Premiumisation saw launches grow from 4% in 2008 to 6% in 2011 |
| Seasonal launches increased to 7% in 2011 vs 2% in 2008 |
That explains why Indian chocolate confectionery industry has been quick to tap the market opportunity within India. Premiumisation of chocolates has seen a 100% growth over last three years, from 4% of launches in 2008 to 6% in 2011. Marcia Mogelonsky, Director of Insight at Mintel Food and Drink, said, “India is a major focus of interest for chocolate confectionery manufacturers as the more mature western markets begin to slow. Major players, including Mondelez, Nestle, and Mars, are making efforts to establish a strong presence in the Indian market.”
However, the chocolate confectionery market in India has challenges of its own -- such as keeping costs low for mass markets and health issues. "The key challenges that the chocolate market is facing in India are inflationary pressures on raw material prices, lack of government initiative, high entry barriers due to duopolistic market and price-sensitive consumer. The rising sugar and cocoa prices are putting pressure on the companies to innovate with ingredients, packaging to offer better prices for the mass market." Dsouza of Mintel noted.