By

Hoshedar Batliwalla (CMBA2/1314)

Payal Patel
(CMBA2/1318)
Arjun Sanka
(CMBA2/1313)
Kuhu Pathak
(CMBA2/1316)
Pushkaraj Halge
(CMBA2/1320)

To understand the
1. Overall market size and growth trends & future
projections.
2. Main market segments, size and consumer behavior
trends.
3. Major macro and global environmental influences on
the market and the critical success factors.
4. Analyze the industry with the help of porters 5 forces
model.
5. Main market competitors, market share, strength &
weaknesses.
6. Main channels of distribution, strengths &
weaknesses.

MARKET

TRENDS

COMPETITION

......

DRIVERS &
CHALLENGES

..............
Indian chocolate market is growing at a compounded
annual growth rate (CAGR) of about 25%
(Commodityonline,2013).
India is considered to be loaded with great potential for
growth of chocolates.
Increased convenience of premium chocolates and budding
taste for dark chocolates aided with higher purchasing
power will lead to further development of the market.
..............
CHALLENGES
DRIVERS
Increase in disposable income. Rise in cocoa prices.
Chocolate gifting prevailing.
High entry barriers.
Attractive pricing.
High excise and
Huge Potential as low per
import duties.
capita consumption.
..............
Premium chocolates.
Gift packaging schemes.
Dark Chocolates.
Entry of retailers and
confectioners.
..............

CADBURY

NESTLE

AMUL
MARS
..............
Source: Commodityonline

DRIVERS
Tradition of gifting chocolates

CHALLENGES

Attractive pricing

Rise in cocoa prices

Increase in disposable income

High entry barriers

Low per capita consumption of

chocolates

High excise and import duties

Social problems like child labour

Changing taste of Indians

Regulations over imported

chocolates

(Marketresearch.com)

(Marketresearch.com)

DRIVERS Vs. CHALLENGES

A chocolate bar is often considered an affordable luxury. (Franchisehelp)
Source: Marketresearch
Source: Franchisehelp

Volume Produced

55,000 tons in 2008 : Mintel, 2013

88,000 tons in 2011 : Mintel, 2013
Sales
Rs. 1,011 Crore in 2008 : Mintel, 2013
Rs. 4,914 Crore in 2011 : Mintel, 2013

Global Chocolate Scenario

Global chocolate market is worth $85 billion annually :
Mintel, 2013

Source: Times of India, 9th Oct 2012

Source: Pitchonnet

Source: KPMG Report, June 2012

Cadbury (India)

Source: International Cocoa Organization, 2012

Source: Indiainfoline

2200

2272

2791

5627

655.803

6460

12428

15480

14095

12808

16800

Net Sales 2012 (US$ millions)

(Make chocolate fair report, 2012)

(Make chocolate fair report, 2012)

Source: Make Chocolate Fair

(Mintel, Pitchonnet)

India has posted

the largest
increase in
volume sales
with 21%
growth between
2008 and 2012

(Economic times, 2013)

(Mintel, 2013)

Sales of
chocolate have
increased from
$418 million in
2008 to $857
million in 2011

Per capita
consumption
increases 200840 gms to 120
gms in 2013.

Seasonal
launches
increased from
2% in 2008 to
7% in 2011

Premium
chocolates saw
launches grow
from 4% in 2008
to 6% in 2011

Seasonal &
boxed assorted
chocolates have
experienced the
fastest growth &
sales are
expected to
expand 13%
between 2010 &
2015

Source: Pitch on net

Source: Mintel
Source: Franchisehelp

(Mintel, 2013)

(Mintel,2012)

(Franchisehelp, 2013)

India-13.8%

Average Growth Rate

2012-2017

Brazil-8.1%
Turkey-6.4%
China -5.8%
Colombia-5.2%
Russia -1.3%
South Africa0.7%
(Euromonitor, International Confectionery News 2013)

Chocolate prices
are estimated
to rise 9.84% to
Rs.574.70 per
kg in 2013 from
an average
price of
Rs.523.20 per
kg in 2012.

(Mintel, Livemint)

The Associated
Chambers of
Commerce and
Industry of India
(ASSOCHAM)
estimated
consumption of
chocolate to
cross Rs.7500
crore by 2015

(Mintel, Livemint)

(Times of India, 2012)

(Mintel, Livemint)

Chocolate sales
estimated at
Rs.6007 crore in
2013

Sales are
expected to rise
to 22.24% in
2013

PROJECTED RETAIL SALES

IN 2017

In US $ BILLION

BRAZIL

18.5

RUSSIA

9.3

CHINA

2.6

INDIA

2.3

TURKEY

1.8

SOUTH AFRICA

712 Mn

COLOMBIA

324Mn
(Euromonitor, Confectionery News2013)

Source: Mintel Source: Times of India, 2012

White Chocolate
Made from the same ingredients as
milk chocolate but without the non
fat cocoa solids. As per FDA 2001 it
must contain at least 20% cocoa
butter and 14% total milk
ingredients.

Milk
Chocolate
Combination of
atleast 10%
chocolate liquor
(not alcohol),
cocoa butter, sugar
and milk or
creamat
(12%min.)

Unsweetened
Chocolate or Baking
Chocolate
This chocolate can be sold as
unsweetened chocolate or
baking chocolate or used to
make other chocolate types.

Sweet Chocolate
A combination of chocolate liquor,
cocoa butter and sugar, but contains
at least 15% chocolate liquor.

Dark chocolate
A combination of chocolate
liquor, cocoa butter and sugar,
but contains at least 35%
chocolate liquor.

Source: Hershey's, 2013

Source: Barry Callebaut, 2012

5.6

5.5

5.3

5.2
5

4.8

4.7
2.1
1.6

1.5

1.5
1

0.7
0.1

0.12

Chocolate confectionary consumption per

person in kilograms
Source: Barry Callebaut, 2012

30-40 years
29%

26-30 years
19%

13-19 years

20-25 years

13-19 years
29%

20-25 years
23%

26-30 years

Source: Economic Times, Aug 2013

30-40 years

HUNGER

Small Individual Chocolates

14

REJUVENTAION

Bar Chocolate

Any Chocolate

INDULGENCE

CELEBRATION

HEALTH

Source: Mars Survey, Economic Times, 2013

ROMANCE

10

11

Any Snack

SHARING

14

12

19

20

23

23

32

23

24

19

23

24
20

24

23

RELAXATION

40 gm
(2008)

India per capita

consumption
(Economic
times,2013)

Traditional
Mithai

Consumer
Preference

Chocolate

70% Urban

Consumption

30% Rural

120 gm
(2012)

Premium chocolates increasing due to growing preference for better quality chocolates.
Consumption of premium chocolates by rural consumers also witnessed a sharp rise in
2012.(Euromonitor, 2013)
Interestingly, small pack sizes experienced a rapid increase in sales across rural areas
and tier III cities owing to the affordability attached to it. In line with the preference for
small pack sizes, volume sales of mini chocolates launched by Mars also started to
emerge in 2012.(Euromonitor, 2013)

IMPULSE SALES
Source: Times of India, 9th Oct 2012

Domestic:
Factors affecting prices of chocolate:
Cost of milk production grown by an annual
pace of 14% in 2012 (Credit Suisse, Oct
2013)
Rise in fodder prices by 23% as compared
to last year in 2012 : (Credit Suisse, Oct
2013)
Rural wage rate has risen by more than
15% (Credit Suisse, Oct 2013)
Evidence of why importers are hesitant to
come to Indian markets: 200 tons of
imported chocolates are rotting in
warehouses across airports & ports due to
Indian regulatory issues of labelling norms
(Economic Times, Nov 13)

International:
India imports more than half of its
requirement of cocoa every year with
the demands increasing at 8% per
annum (Indian Express, 2012)
Rise in global cocoa prices by 9.84%
in 2013 due to production shrink in
West Africa : (Livemint, 2013) is
going to hamper Indian chocolate
market in India.

Source: Economic Times Source: Livemint Source: Indian Express

Chocolate industry offers a wide variety of opportunities for

the small business owner, even when economic recession is
manageable and is growing despite increased healthconsciousness and calorie counting consumers.
(Franchisehelp, 2013)
Growth will be driven by population growth as well as
expansion into new markets, product innovation and rising
disposable income levels leading to greater purchasing of
premium offerings. (Franchisehelp, 2013)
Chocolate and confectionery makers say adult consumption
of chocolates and candies is growing at the fastest pace in
India, and companies like Mondelez, Mars, Nestl, Perfetti
Van Melle, Parle and ITC are launching new products and
brands that target the grown-up. (Times Infomedia, 2013)
Seasonal and boxed assorted chocolates have been
experiencing the fastest growth, and sales are expected to
expand 13% between 2010 and 2015(Franchisehelp,2013)

Product innovation in 2010 brought a 16% increase in new

product releases over 2009(Franchisehelp,2013)

Maximizing the
distribution
channels has
enabled touch
points at almost
every available
retail venue

Rising income levels and

rapid development in
rural markets helps
chocolate companies
penetrate into the
untapped rural sector

Adaptation to different
taste buds makes a
chocolate available for
every palette

Source: Times of India, 9th Oct 2012

Increasing
demand for
sugar-free and
diet chocolates
among
consumers

Bargaining Power of Buyers (High)

Bargaining Power of Suppliers (Moderate)

(Cocoa farmers & others)

Diverse offerings to choose from.

Price sensitive consumers for low-priced chocolates,
especially rural consumer base
No brand loyalty.
Chocolate retailers margin ranges between 10 to 20%
depending on the price point at which the product is
placed.

High Foreign dependence

Domestic market suppliers short
But the bargaining power of suppliers is moderate to
high.
Limited access to distribution channels for importers.

Intensity of rivalry among competitors (High)

Few major players but with high influence

Price wars.

Advertising battles

High launches of product lines

High quality of customer service

High variety of products offered

Potential Entrants (Moderate)

Threat of substitute products & services

(Moderate)

Difference in products.
Need for large capital requirements.
Health-consciousness and calorie counting products.
Product innovation can result in new entries.
Caramel candies.

Threat of substitutes such as soft drinks, snacks &

beverages is moderate.
Industry must also compete in retail arena with
traditional mithai.
Sugar candies are more readily available than
chocolate.

Amul
8%

Nestle
20%

Sales
Cadbury
56%

Mars
16%

Cadbury

Mars

Nestle

Source: Euromonitor

Amul

Nestle Indias market share in chocolates dropped from

26.1% in 2008 to 23.6 % in 2012, Nielsen Co.In the same
period, Cadbury owner Mondelez Indias market share fell
from 70% to 64.5%. (Livemint,2013)
Mondelez Int. announced plans to invest Rs.1000 crore in
Andhra Pradesh to establish the company's largest
manufacturing plant in Asia Pacific. This investment in is part
of their ongoing supply chain reinvention plan. (Business
Today,2013)
Mars is exploring gujrat to set up new factories as it imports
all the chocolate form US presently. (Business standard,2013)
Both Nestle and Mondelez lost market share to Mars
International India Pvt. Ltd and Ferrero India, which are
gaining ground in chocolate confectionery driven by new
products, according to a March report by research firm
Euromonitor.(Livemint, 2013)
Premium chocolate confectionery brands such as Ferrero
Rochers, Mars and Tobelerone outperformed overall chocolate
confectionery in terms of growth in 2011 and 2012, according
to the Euromonitor report. (Livemint, 2013)

1. Strong presence in the

United States of America, UK
2. It is a global chocolate brand and India but they need to
built upon a reputation for fine look for a portfolio of
products and services.
countries, in order to spread
3. One of the Fortune Top 100 business risk.
Companies to work for in 2005. 2. Cadbury's recall over 1
(CNN Money)
million chocolate bars over
4. Cadbury launched its Cocoa salmonella (BBC UK,2007)
Partnership in 2008 - a ten-year, 3. The company has no
45 million (US$ 73 million)
apprehensions of
investment in cocoa
cannibalization of its chocolate
sustainability in Ghana, South- brands.
east Asia, India and the
Caribbean.(Tradeforum,2010)

Source: Marketingprofs

CADBURY WEAKNESSES

CADBURY STRENGHTS

1. Wide consumer base across

the globe.

2. Strong support by its parent

company which is listed under
the Fortune 500 companies.
(CNN Money,2013)
3. Invested Rs.280 crore- Global
R&D centre and for India in
Manesar.(Livemint,2013)
4. Mergers and acquisitions and
joint ventures to increase market
share. (Nestle M&A,2013)

1. Being a big global brand,

numerous controversies in
different countries of
operation can cause issues.
2. Complex supply chain
management.

5. Strong advertising.

Source: UNC

NESTL WEAKNESSES

NESTL STRENGHTS

1. Strong brand equity in the

Indian market.

2. Products available at
affordable price.

3. Successful advertising
and marketing campaigns.

1. Low market share in

chocolates segment.
2. Strong competition from
international markets.

4. Strong network of Amul

retail outlets, stalls and
parlours.

Source: Business Standard, 2007

AMUL WEAKNESS

AMUL STRENGTHS

1. High brand equity.

2. Even after a late entry to the

Indian market it has a good market
share.
3. Mars products outsells chocolate
candy market internationally,which
implies their great potential.
4. Established image and advertising
presence for Mars products.
5. Volume sales of mini chocolates
launched by Mars started to emerge
in 2012. (Euromonitor,2013)

1. Promotions is weak.
2. M&Ms is the number one selling
candy in the chocolate market;
however this product steals most of
the promotion and advertising
money.
3. Milky Way has a low sales
percentage of Mars domestic market
share.
4. Because of constantly changing
campaigns, people are not aware of
Milky Ways positioning in the
market.

Source: UNC
Source: Euromonitor

MARS WEAKNESSES

MARS STRENGHTS

1. Top Products in the Mind of

Consumers.

AMUL

MARS

NESTLE

CADBURY
.

With support of District

Contributed $ 3,012,457 in
Rural Development Agency
form of money and food
(DRDA) will provide
(Triplepundit, 2013)
interest free loans to its
milk producers in Anand
and Kheda districts to set Flagship Vision For Change
up pucca toilet
Program to support cocoa
blocks.(Amul CSR,2013)
farmers
Amul extended its expertise
in implementation of the
Swarnjayanti Gram
Swarozgar Yojana (SGSY).
(Amul CSR,2013)
Blood donation Camps are
organized in Amul Dairy
Campus. (Amul CSR,2013)

Supporting local schools

Blood donation camps

and health awareness
programs in and around
the factory locality(Nestle
CSR,2013)

Joined hands with Akshaya

Patra and distributed food
across India
(Cadbury CSR,2013)
SARVAM(Sri Aurobindo
Rural Village Action
Movement) : a project to
redevelop two villages in
the coastal regions of
Puducherry

Training farmers on animal

health and welfare
Veterinary check ups
(Nestle, official site 2013)

(Cadbury CSR,2013)

$ 4 million to non-profit
organizations for humanity
development

Source: Nestle Source: Cadbury India Source: Triplepundit Source:Amuldairy

(Cadbury CSR,2013)

Manufacturer
Wholesaler

Wholesaler

Company Owned
Or Stockist

Grocery/Kirana stores
Airport shops,
Shopping Malls
Speciality Shops

Retailers:
Gift shops
Book shops
Railway Stations Bus Stands
Chemist
Super markets
Tobacco Kiosk

Market for confectionary products in India report, 2005

WEAKNESSES

STRENGTHS
Retail sector is changing and the organized
sector is gaining ground with the emergence of
supermarkets and hypermarkets in metropolitan
India.
Once shipments are cleared by ports, it
penetrates into the market very easily and
reaches the consumers effortlessly.
Small retail shops have a presence almost
everywhere which helps reaching the rural
customers.
(Market for Confectionary Products in India
Report, 2005)

Poor infrastructure, such as transportation,

storage, and refrigeration facilities.
Manufacturers and importers rely heavily on the
middle man for the distribution of confectionery
products in India.
Most importers rely on distributors or wholesalers
to reach retail outlets, confectionery
manufacturers often rely on C&F agents or
dealers to work with the wholesalers and
distributors.
Indias retail sector is highly unorganized, as
small independent stores are the main outlets for
consumer purchases.
(Market for Confectionary Products in India
Report, 2005)

STRENGTHS Vs. WEAKNESSES

Raw Materials

Manufacturing

Packaging

Transport &
Distribution

Promoting
Sustainable
Consumption

Wastes &
Recovery

Agricultural raw
materials such
as cocoa are
sourced from
suppliers into
safe and valueadded food
products for
consumers.

Manufacturing
encompasses all
the processes that
are necessary to
transform
perishable raw
materials into
safe, shelf-stable,
value-added food
products for
consumers.

Packaging is
essential to
reducing food
waste by
protecting
products during
transportation
and storage.

Products are
delivered via a
network of road,
rail and sea to an
increasingly
urbanised
population.

The desire to
create a more
sustainable world
requires
understanding,
collaboration and
action at many
levels by
governments,
companies, brands
and consumers.

Waste has
consequence
s beyond the
loss of
valuable
products.

High
environmental
standards have
to be met by
suppliers and
cocoa farmers.

Efficient
technologies and
applying best
practices are used
to improve
environmental
impacts.

It is also vital
for food safety,
freshness and
providing
consumers with
nutritional
information and
portion
guidance at the
point of
purchase.

On a daily basis,
large
consignments are
transported to
customers from
factories and
distribution
centres, delivering
the products in
highest quality and
on time from the
factory to the
consumer.

Source: Nestle.com

This drive also

comes from
consumers
themselves, who
want to understand
the environmental
impacts of their
choices.

If waste
increase,
then scarce
resources
such as
water, energy
and land
generate
additional
costs for
treatment.
Reverse
logistics.

Amul,CSR :
http://www.amuldairy.com/index.php/csr-initiatives/tribhuvandas-foundation
BBC UK:
http://www.news.bbc.co.uk/2/hi/uk_news/England/6900467.stm
Barry Callebaut:
http://www.barry-callebaut.com/cms/download.dhtml?url=/cms_files/N-9004enen_FileFile_35.pdf,filename=BC_Journal%202012_E_Chocolate%20consumption%20
and%20taste%20preferences.pdf&ei=BICfUtGnIoOTrgeDtYDgDg&usg=AFQjCNHgNe1fK
vFfDZeXAODwCPPDiMobzw&bvm=bv.57155469,d.ZGU
Business Standard:
http://www.business-standard.com/article/companies/amul-revamps-chocolate-strategy107091101125_1.html
Business Today: http://businesstoday.intoday.in/story/cadbury-india-plantinvestment/1/197592.html
Business Standard:
http://www.business-standard.com/article/companies/us-based-mars-eyes-gujarat-forchocolate-plant-113061801032_1.html#

Cadbury India:
http://www.cadburyindia.com/in/en/about/pages/ourbusinessinindia.aspx
Commodity Online: http://www.commodityonline.com/news/india-sweet-toothchocolates-the-new-festive-favourite-56742-3-56743.html
Confectionery News:
http://www.confectionerynews.com/Markets/Mondelez-chocolate-chief-pinpointsmarkets-beyond-BRIC
CNN Money:
http://www.money.cnn.com/search/index.html
CNN Money:
http://www.money.cnn.com/magazines/fortune/global500/2013/snapshots/6126.html
Euromonitor:
http://www.euromonitor.com/chocolate-confectionery-in-india/report
Economic Times: http://articles.economictimes.indiatimes.com/2013-0801/news/40963259_1_chocolate-consumption-chocolate-market-indian-consumers
Economic Times: http://articles.economictimes.indiatimes.com/2013-1102/news/43611397_1_fssai-indian-food-new-labelling-norms

Franchise Help:
http://www.franchisehelp.com/industry-reports/chocolate-industry-report
Food Confectionary:
http://69.17.111.188/site/c4/w116/downloads/India.pdf
Indian Express:
http://www.indianexpress.com/news/indians-get-sweet-on-chocolates/972675/0
ICCO:
http://www.icco.org/about-cocoa/chocolate-industry.html
India Infoline: http://www.indiainfoline.com/Markets/Company/Fundamentals/ProfitLoss/Cadbury-India-Ltd/500793
KPMG:
http://www.kpmg.com/UK/en/IssuesAndInsights/ArticlesPublications/Documents/PDF/M
arket%20Sector/Retail_and_Consumer_Goods/chocolate-of-tomorrow.pdf

Live Mint: http://www.livemint.com/Companies/xBxGxG5fHCAIDg8Brn0wyH/Nestleexpects-India-to-become-its-fourth-biggest-market-by.htm

Live Mint: http://www.livemint.com/Industry/JAAQ4OuYXMmB4m7ZsHm2SI/Nestle-tointroduce-premium-chocolate-brands-in-India.html
Live Mint: http://www.livemint.com/Industry/dzZbXrsKi74yU2v6bHUMJK/Rising-globalcocoa-prices-to-hurt-Indian-chocolate-buyers.html
Make Chocolate Fair:
http://makechocolatefair.org/issues/cocoa-prices-and-income-farmers-0
Marketingprofs:
http://www.marketingprofs.com/ea/qst_question.asp?qstid=13692#ixzz2mX9SLrpJ
Mintel:
http://www.mintel.com/press-centre/food-and-drink/indias-craving-for-chocolateunwraps-business-opportunities-for-manufacturers
Market Research:
http://www.marketresearch.com/Netscribes-India-Pvt-Ltd-v3676/Branded-ChocolateIndia-6795080/

Nestle:
http://www.nestle.com/csv/environmental-sustainability/highlights-challenges
Nestle M&A:
http://www.nestle.com/investors/mergers-and-aquisitions
Pitch on Net: http://pitchonnet.com/blog/2012/11/08/chocolate-consumption-doublesin-india-since-2008/
Times Infomedia:
http://issuu.com/timesinfomedia/docs/beverages___food_august_issue
Times of India: http://articles.timesofindia.indiatimes.com/2012-10-09/indiabusiness/34342337_1_chocolates-traditional-sweets-d-s-rawat
Trade Forum:
http://www.tradeforum.org/Cadbury-Goes-Fairtrade/
UNC:
http://www.unc.edu/~refisher/swot.html