OUTLOOK ON CHOCOLATE MARKET IN INDIA
THE CHOCOLATE MARKET OF TOMORROW
By Rajendra Mangharam, Mangharam Chocolate Solutions
Chocolates used to be those rare, heavenly treats that our parents rewarded us with only on special occasions. Thankfully, this new generation does not have to wait for that special birthday or anniversary….they are indulging in this wonderful confection like there’s no tomorrow.
Chocolate, as a food, appeals to most and is welcomed by any and all age groups. It is now a “favourite confection” and even the growing masses are acquiring a taste for Chocolate. It can be gifted on any occasion and Chocolates are fast replacing traditional sweets and savouries as gift options.
Chocolates are here to stay!
Chocolate is such a versatile food – it can be found everywhere :
In dedicated Chocolate Shops – in all shapes, sizes, colours, fillings and flavours
In Bakeries – in cakes, pastries, cookies and their decorations
In Cafes – in the form of hot chocolate drinks and milk shakes
In Super-markets – in the form of bars and slabs and even health foods, morning cereals
In Holiday Hill-stations like Ooty, Kodai, Coorg, Munnar, Mussorie….
In Star Hotels, at Corporate events, at Fun-fairs, in school canteens, even in your friendly neighbours’ refrigerator !
In short, Chocolate has engulfed our lives ! And why not ? Chocolate tastes uniquely delicious - distinct and irreplaceable. Chocolate blends in very well with other foods and drinks. Chocolate is rich, satisfying and very good for health. It’s sophisticated and it’s different.
Small wonder that the Chocolate Market in India is seeing double-digit growth rates. The growth of Chocolate in our country is around 15% per annum.
And, to meet this spurt in demand, all are joining the band-wagon.
The big Multi-national players – Mondelez(Cadburys), Nestle, Hershey’s and a few more cater to the organised sector. Many Indian manufacturers are also active and carving a niche for themselves in this space – they are Amul, Campco and many more.
The above players are introducing new innovative products and packs with amazing regularity and grabbing the attention of Chocolate-lovers nationwide. Notable among the new innovations and introductions are Cadburys Bubbly, Hersheys’ Brookeside and Amuls new range of single origin bars.
The Un-organised sector too, is witnessing excellent growth as they are catering to the needs of the smaller towns and rural areas. They add cheer to the lives of school-going children in smaller places where Chocolate had never reached earlier.
There is another note-worthy sector – Fancy Chocolates ! The suave, urban consumer is now being served fine, hand-crafted Chocolate bon-bons made using time-tested European techniques. These masterpieces are being presented in attractive packs. These Fancy Chocolate pralines are mostly given as gifts resulting in a tremendous spurt in demand during festive seasons. These manufacturers, mostly ladies, thrive in large urban markets all over India. In fact, so popular and well accepted are these Chocolates that almost every apartment block in major cities like Mumbai has a homemade chocolate maker-entrepreneur. Typically, they start small ( at home, mostly ) but as soon as their business reaches commercially viable levels, they expand into mechanised production in industrial centres. They buy chocolate manufacturing equipment and soon become small scale chocolate manufacturers.
This segment is growing so fast that to cater to their needs, a host of new industries have sprung up – noteworthy among them are raw material suppliers, chocolate equipment suppliers ( Mangharam Chocolate Solutions is one of them fulfilling the demand for Chocolate machines, Chocolate melters, chocolate moulds, etc. ), packing material suppliers to name just a few.
The growth of the Chocolate industry in India has also made our farmers happy. Kerala has been a cocoa producer for decades now, but only recently has it been recognized on the world map of chocolate. One major Swiss Chocolate manufacturer has made a single origin bar using our very own Cocoa beans from Kerala. Surely a wonderful achievement for all of us, especially the ones who have been toiling for years braving the heat and rain, ensuring that we get our favourite bar of Chocolate from our friendly, neighbourhood shop-keeper. The farmers in the other Southern states of Karnataka, Tamil Nadu, Andhra Pradesh and Telengana too have also started growing this cash-crop, Cocoa, and hopefully will reap the benefits soon. Noteworthy are also the achievements of some enterprising farmers who has started producing Organic Cocoa Beans, which will help them reach an international market, making India proud.
The media has also played its role in the growth of the Chocolate industry – catchy advertisements and memorable ad films have created a new generation of consumers who seem to be happy trying out various different brands and blends of Chocolate with gusto. Noteworthy also are reports in print media about the health benefits of Chocolate. These go a long way in making this delicious confection more and more popular. Many among us cannot believe that good health and good taste can go hand-in-hand !
One of the reasons for the popularity of chocolate is also the introduction and acceptance of “Compound”. Compound is essentially a Chocolate without an important component - Cocoa Butter. The extracted Cocoa Butter is sold at high premiums to cosmetic makers world-wide. Now, to the Chocolate sans Cocoa Butter, a substitute fat made from hydrogenated vegetable fats or palm oil is added, making it a confection called Compound. This is generally used in the same manner as Chocolate as it looks the same as Chocolate. Compound is approximately half the price of real Chocolate. The affordable price of this product, Compound, has increased the market manifold, creating new customers, who had hitherto only heard of Chocolate and not tasted it. Compound does not taste anywhere close to the real Chocolate, neither does it have the “snap “ sound heard when a good chocolate is cracked into two. It is, however, an affordable option to Chocolate and hence, gaining in popularity. Many among us do not really know the difference between Chocolate and Compound, which Indian consumers may learn over time and many tastings.
SCOPE OF CHOCOLATE IN INDIA :
The growth of Chocolate in India is speeding at a healthy clip of 15 % per annum. This momentum will be sustained for many years to come. As such, India is a huge market – a market where volumes can reach phenomenal heights if a product gains acceptance. Indian consumers currently buys not even a few hundred grams of chocolate a year, while a consumer in Switzerland buys more than 8 kilograms of chocolates every year. The years ahead will see many new developments -
a. a spurt in demand for Chocolate across all segments
b. an increase in awareness about the different types of Chocolate
c. the advent of new players in the market both indigenous as well as from abroad
b. new innovations in the field of Chocolate
c. many new opportunities in the gifting space ( already visible in the Personalised Chocolate segment ),
d. many new jobs being created for technical and non-technical staff
e. change in the eating habits of our populace
f. increased demand for specific high-end Chocolates from discerning buyers who are willing to pay premium prices for them.
EXPORTS : Our favourite duty-free purchase when returning home to India could well become an Indian export ! With all this attention to detail and quality, we could become a global player in this field. Major global manufacturers of Chocolate like Lindt, Toblerone, etc. cater to the high-end segment. We could create a niche for ourselves in the mid-range segment, offering good quality at affordable prices. Such a market surely exists, especially in the Middle-East, South-east Asia, Africa, etc. and we could to get a foothold in the world-market through this route. Likewise, the positive growth of the Chocolate industry could create new export opportunities for equipment and ancillaries manufactures like Mangharams to export Chocolate-making equipment to other countries. The Rupee-Dollar exchange rates are surely working in favour of Indian exporters and all we have to do is focus on this segment.
In conclusion, the future of the Indian Chocolate Industry is as delicious as a Shahi-tukda, tasty as a Kesar Peda, juicy as a Gulab Jamoon and crisp as a hot Jelibi ! Bon appetite !