Chocolate Industry Essay Example for Free

Chocolate Industry Essay * Indian chocolates industry is growing at a rapidly18-20% per annum. * Cadburys occupy about 72% of the chocolate/confectionery market with Dairy Milk, Five Star, Perk, Gems * The organized sector in chocolates constitutes 40%. Chocolate consumption in India is low, per capita consumption in urban India is estimated at about 250g compared to 8-10 kg in Switzerland. * Indian chocolate market is estimated to be close to Rs 2500 cr. of which metros like Mumbai and Delhi occupy a major share. HISTORY * 1765, First Chocolate Factory In the USA * 1800, Chocolate is an Industry * 1819, The Swiss Invest in a Chocolate Factory. * 1847, An English Company Introduced Fondant Chocolate * 1923, The CMA (chocolate manufacture association)was Established * 1956 Cadbury milk chocolate launched. * 1957 Cadbury 5 star launched. * 1970 Cadbury eclairs launched. * 1974 Amul chocolate launched. * 1986 Cadbury milk chocolate re-launched as Cadburys dairy milk. * 1991 Nestle chocolates TYPES OF CHOCOLATES 1. Unsweetened chocolate Unsweetened chocolate is chocolate in its rawest form. This unadulterated chocolate is also known as baking, plain or bitter chocolate and popularly used as the base for cakes, brownies, confections, and cookies. Unsweetened chocolate is made from pure chocolate liquor that has been refined and contains 50-55% of cocoa butter. 2. Milk chocolate Milk chocolate is the combination of chocolate liquor, cocoa butter, vanilla, milk solids, and lecithin. This type of chocolate could be kept up to a year if stored in a cool, dry place. Milk chocolate must contain at least 10% of chocolate liquor, 3. 7% milk fats, and 12% milk solids. 3. Semi-sweet chocolate and Bittersweet chocolate Both Semi-sweet and Bittersweet chocolate contain cocoa liquor, sugar, cocoa butter, vanilla, and sometimes lecithin. Semi-sweet and Bittersweet chocolate, if well wrapped and stored in a cool, dry place with good air circulation, could be kept for several years. Major types and brands of chocolates * Cadbury * Nestle * Amul Other * Comp co * Ferrero * Mars * Govind * Lindt * Hershey Chocolate global market share * The global chocolate market is expected to grow from $83. 2 billion in 2011. to $98. 3 billion in 2016 at an estimated CAGR of 2. 7% from 2011 to 2016. * The market in Asia is driving sales and is expected to hold a 20% share of the global market in 2016. The market in Asia is expected to have a high CAGR of 4. 7%. Chocolate global market share Source: (Euro monitor). Chocolate Market in India * Chocolate market is estimated to be around 2500 cores growing at 18-20% per annum. * Cadbury is the market leader with 72% market share * The per capita consumption of chocolate in India is 400 gram compared with 1. 9 kilograms in developed markets such as the United Kingdom * Over 70 per cent of the consumption takes place in the urban markets Chocolate Market in India A Snapshot * Jan. 2011 Kraft Foods acquires Cadbury India * Jul. 2011 Hershey’s exits JV with Godrej Group * Oct. 2011 Ferrero opens first production facility in India * Nov. 2011 Campco increases production to 23,000 ton. /year * Dec. 2011 Kraft Foods increases investments in Cadbury India The Indian confectionery market – Source:- Industry experts and leading manufacturers estimates, Promar’s trade interviews Indian confectionery industry Share by Volume 000 tonnes (2009) Source: (Euro monitor, 2009). Indian confectionery industry Share by Value (Rs cr. ) 2009 Source: (Euro monitor, 2009). CONSUMPTION SEGMENTATION BY AGE Segment| Share (%)| 2 to 8 years old| 16| 8 to 25 years old| 53|. 25 to 54 years old| 22| Over 55 years old| 7| Source: Ministry of food processing industries CONSUMPTION SEGMENTATION BY REGION Segment| Share (%)| North| 35| East| 12| West| 33| South| 20| Source: Ministry of food processing industries Product Variation Segment| Share (%)| Moulded Chocolates| 50| Count line bars| 33| Sugar panned| 13| Choco panned| 4| Source: Ministry of food processing industries Market share different company Company | Market share % | Cadbury | 72% | Nestle | 18% | Amul | 4% | Other | 6% | PRODUCTION YEAR WISE Source: Central Statistical Organisation (CSO). Import of Chocolate Sugar confectionery (value in us$) Source: commercae. nic. in Import of Chocolate Sugar confectionery (volume in mt ) Source: commercae. nic. in Consumer Trends * Mithai- is getting substituted by chocolates Convenient packaging and better shelf life. * Sudden spurt in advertisement between July Sep in festival seasons. * The range and variety of chocolates available in malls seems to be growing day by day, which leads to lot of impulse sales for chocolate companies. * Chocolates which used to be unaffordable, is now considered mid-priced. * Designer chocolates have become status symbols. * In past, consumers had negligible inclination for dark chocolates. But now we have seen a change in the Indian palate, which is increasing the base of this sub-segment Challenges in Indian chocolate industry * TEMPERATURE * UNAVAILABILITY OF CONTROLLED REFRIGERATION * RAW MATERIALS * TRANSPORTATION * THREAT FROM FOREIGN BRANDS Growth opportunities in Indian chocolate industry Untapped Market Limited Consumption: The fact that chocolate is not a traditional food, high prices and domestic production problems will provide the main problems to market growth. As these markets develop, prices will fall making these products more accessible to the wider population. However the Indian market is still untapped and provides immense scope for growth, both geographically as well as product basket wise. Chocolate consumption in India is extremely low. The per capita chocolate consumption in India is still much below the East Asian standards. Hence per capita consumption has a immense scope for improvement. Strategies for Growth Success in India 1. Revamp the product to keep the excitement alive. 2. Companies should look at new avenues, while expanding the reach of its products. Distribution will hold the key. Companies need to reach out to smaller towns, where three-fourths of the population does not even know the product. 3. Merger Acquisitions: Mergers Acquisitions with companies that match the product portfolio overall growth strategy should be considered which will not only strengthen the company to establish a stronger hold in the country but also ward off possible competition in the select category. Such collaborations will also facilitate companies to use each other’s distribution networks. Conclusion * Cadburys /Nestle occupy about 90% of the chocolate /confectionery market. * * While there are some places in India where people have never even tasted chocolates once. * Understanding the consumer demands and maintaining the quality will be essential. References * www. indiainfoline. com * http://www. marketsandmarkets. com/PressReleases/global-chocolate-market. asp * Central Statistical Organisation (CSO), Compiled by India stat. * http://www. espatial. com/articles/a-valentines-day-map-world-chocolate-consumption/ * www. ministryoffoodprocessingindustries. com * www. business-standard. com * http://www. indianmirror. com/indian/industries/chocolate. html * www. ibef. org * www. fmcg markets. com.