Hershey yesterday (9 June) told just-food that it is to enter the chocolate sector in India with the launch of one of its flagship brands, Kisses with local venture partner Godrej Beverages & Foods. Here, along with Euromonitor’s Confectionery in India report, we take a look at the Indian chocolate market.
- With more than half of chocolate confectionery value sales in India being attributed to affordable SKUs priced between IRN5-10 (US$0.11-$0.21), chocolate confectionery was unaffected by the low consumer confidence and tightening of purse strings which began in urban India in late 2008. The category continued on its growth trajectory unscathed, as despite global economic slowdown average consumer discretionary spending power continued to rise. Growth was also driven by ongoing product and brand innovation by manufacturers who sought to increase the consumption occasions for chocolate confectionery as well as strived to cater to the aspirations and purchasing power of the various consumer segments through launches in standard as well as premium categories.
- Countlines was the fastest growing category in 2009 due to strong new product development and advertising and promotional activity in this category for key brands such as 5 Star, Perk and Munch in 2008 and 2009. The media blitz for newly-launched Perk Poppers (by Cadbury) and Munch Pop Chocs (by Nestlé) highlighted the Perk and Munch brands and brought attention to this category. Countlines benefited over tablets due to health-conscious consumers preferring lighter indulgent products such as Ulta Perk and KitKat Mini. 2009 also saw Nestlé India’s Munch and Bar-One and Cadbury India’s 5 Star and Perk hike prices for the smallest SKU (5-7g) from INR2 to INR3 due to rising cost pressures and unsustainability of these low price points.
- Among chocolate tablets, plain milk is the most popular with a retail value share of 80% in 2009. Cadbury’s Dairy Milk is the greatest contributor to the huge share of plain milk tablets. Filled (12%) and plain dark (2%) increased their share in 2009 with Cadbury India giving Bournville a high-profile re-launch in plain dark and filled variants. The growing popularity of imported filled/plain dark tablet brands such as Lindt and Toblerone also contributed to the expansion of the filled and plain dark categories. Plain white continues to be spearheaded by Nestlé India’s Milkybar with limited availability of other brands.
- The chocolate confectionery competitive landscape is dominated by Cadbury India and Nestlé India with value shares of 58% and 33%, respectively, in 2008. Both companies were instrumental in building up chocolate confectionery in India in recent decades, with major investments in advertising and brand building over the years. Gujarat Co-operative Milk Marketing Federation is the third largest player and other players are mainly multinationals with a very niche presence in India.
- Competition is expected to intensify over the forecast period as international brands from Mars and Hershey are expected to make an appearance in India during this period. In addition, domestic biscuits player Surya Food & Agro is expected to launch economy chocolate confectionery brands in India by 2010. With Indian consumers’ appetites for premium chocolate growing, multinational brands such as Lindt, which have already forged a small presence in India, are also expected to give premium offerings from Cadbury India and Nestlé India tough competition.
- Sales of chocolate confectionery are expected to more than double from INR26.9bn in 2009 to INR54.98bn in 2014 (63m tonnes in 2009 to 127m tonnes in 2014).
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