For the complete report, get in touch with us at : info@netscribes.com Indian confectionery industry constitutes the largest food processing segment in India. It can be categorized into sub sectors such as sugar based confectionery, chocolate based confectionery and gums. In India, chocolates are considered as indulgence foods which find its off-takes as a result of impulse buying. However, increased disposable income coupled with taste for luxury products have catapulted chocolate market towards growth. Constant innovation towards making products accepted by consumers have resulted in leading brands diversifying into different variants such as wafers and light weighed chocolates. The report begins with an overview of the confectionery industry in India providing the market size and growth as well as information regarding market segmentation in India. This is followed by a primary segmentation of the industry. An overview of chocolate market provides an introduction to the sector and covers the market size and growth along with segmented consumption data in India. An analysis of the value chain has been included. A brief flowchart of the processing steps of cocoa beans has been highlighted. It is immediately followed by the procedure adopted by major players to manufacture chocolates. This section then divulges information about the distribution model prevalent in the sector. The following section deals with an EXIM trend over a period of five years. Porter’s Five Forces analysis concludes this section. An analysis of the drivers explains the factors for growth of the market and includes tradition of gifting chocolates, attractive pricing, increase in disposable income and low per capita consumption of chocolates. India has woken up to the fad of chocolate being considered as a gift proposition. While even till few years back sweets were the only option in delicacy gifting, overt media exposure and smart marketing techniques have positioned chocolates as an alternative. Further, entry of major players in the country has allowed for easy availability of products to consumers. Another feature that works for this sector is the attractive pricing of products which particularly suits the Indian scenario wherein consumers seek economical products. Characteristics such as affordability and availability will come into play only if people have the purchasing power. Rising disposable incomes is a major driver primarily since chocolates are associated to being luxury items India. Finally, India has low per capita consumption of chocolates compared to other developed nations across the globe. It poses latent opportunity for growth as the country strives towards more off-takes for the product. However, the sector is also facing certain challenges. Factors such as rise in cocoa prices, high entry barriers and high excise and import duties pose as impediments for this sector. Government participation in this sector covers Prevention of Food Adult

1. Branded Chocolate Market – India
Branded Chocolate Market India
February 2012

2. Executive Summary
 Indian Confectionery industry is considered to be growing at a1% CAGR over 20‐‐‐‐‐
Market  India is considered to be laden with great potential for growth of chocolates
 Increased availability of a2 chocolates and growing taste for a3 chocolates aided with higher
purchasing power will lead to further development of the market
Drivers Challenges
– Increase in disposable income – Rise in cocoa prices
p
Drivers &
Di & – Chocolate gifting
– High entry barriers
Challenges – Attractive pricing
– High excise and import duties
– Low per capita consumption of
chocolates
 Premium chocolates  Chocolate boutique
Trends  Dark chocolates  Entry of retailers and confectioners
Major Players
Competition Company 1 Company 3
Company 2 Company 4
BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 2

3. •Introduction
•Market Overview
•Import Export
•Drivers & Challenges
•Government Participation
p
•Trends
•Competition
Competition
•Strategic Recommendations
•Appendix
BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 3

4. Greater consumer spending aided with demand for quality
products to boost the market
Chocolate Market – Overview Market Size and Growth
• Chocolates though considered as impulse products in INR bn
India are witnessing growth over time 40
p%
% T
• Per capita consumption of chocolate is x1 gms 30 S
• y1% of the consumption of chocolate is accounted R
20 Q
P
for by the urban population base
10
• Initially, chocolates were limited to certain flavours
Initially, chocolates were limited to certain flavours
0
such as milk or caramel
20-- 20-- 20-- 20-- 20--
 With the passage of time, chocolate has been introduced
in new variants such as v1, etc.
 Even variants such as chocolates with dry fruits and nuts Segmentation of Consumption (2011)
also created a new trend
• Indian branded chocolate market is dominated by c4%
c1% Segment 1
player 1 and player 2
Segment 2
 This proves to be detrimental to the small players as well c3%
as new entrants in the market Segment 3
Segment 4
• Rise in disposable income and enhanced availability
of products have resulted in the growth of the sector
• Further, v2 chocolates which are in most cases c2%
imported have also witnessed a growing trend
Source:
BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 4

5. Taste for premium products, specially by rich urbanites, have
led to increase in imports of chocolates
Imports Imports (Value)
• Imports of chocolates have increased considerably INR mn
g g p
owing to the demand generated for imported 2,500
,
D
chocolates 2,000 q%
• Imported chocolates are seen as v3 products and 1,500 C
B
considered as v4 products 1,000 A
• Imported brands have contributed y2% of the total
Imported brands have contributed y2% of the total 500
sales during festive seasons in 20‐‐ compared to y3% 0
in 20‐‐ 20----- 20----- 20----- 20-----
Segmentation – Countrywise (2009‐10) Segmentation – Countrywise (2010‐11)
Country 1 Country 7
a% a1%
Country 2 Country 8
f% Country 3 f1% Country 9
Country 4 Country 10
b%
Country 5 b1% Country 11
Country 6 Country 12
e% c% e1%
c1%
d% d1%
Source:
BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 5

6. Drivers & Challenges – Summary
Challenges
Drivers Rise in cocoa prices
Tradition of Gifting Chocolates
High entry barriers
Attractive pricing High excise and import duties
Increase in disposable income
Low per capita consumption of
L it ti f
chocolates
BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 6

7. Government Participation – Summary
Prevention of Food
Adulteration Act 1954
Adulteration Act 1954
Initiatives
Food Safety and Standards
Go e
Government policies
e t po c es
Act 2006
A 2006
BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 7

8. Trends – Summary
Demand for premium chocolates
Surfacing of dark chocolates
Key
Concept of chocolate boutique
Trends `
Demand for healthy options
Entry of retailers and confectioners
8

9. Public: Foreign Company – Company 1 (1/4)
Company Information
SAMPLE
Offices and Centres – India
Place 1, Country 1
Corporate Address
Tel No. +123456 City
Ci
Fax No. +123456
Website http://www.abc.com/index.html
Year of Incorporation 19‐‐
Ticker Symbol ‐‐‐‐
Stock Exchange
Products and Services
Products and Services
Head Office
Category Products/Services
Category 1 Product 1 Key People
Name
N Designation
D i ti
Category 2 Product 2
Person 1 D1
Category 3 Product 3
Person 2 D2
Person 3 D3
Person 4 D4
Source:
POLYMER MARKET IN INDIA 2012.PPT 9

10. Public: Foreign Company – Company 1 (2/4)
Financial Snapshot
i i lS h Key Ratios
K i
y‐o‐y change
Particulars 2010 2009 2008 2007
Total Income Profit (2010‐09)
Total Income
INR mn INR mn Profitability Ratios
Profit / Loss
80,000 10,000 Operating Margin a a1 a2 a3 a4
X
60,000 W Net Margin b b1 b2 b3 b4
V
U Profit Before Tax Margin c c1 c2 c3 c4
40,000 5,000
Return on Equity d d1 d2 d3 d4
20,000
Return on Capital Employed e e1 e2 e3 e4
0 0 Return on Working Capital f f1 f2 f3 f4
20‐‐ 20‐‐ 20‐‐ 20‐‐ Return on Assets g g1 g2 g3 g4
Financial Summary Return on Fixed Assets h h1 h2 h3 h4
Cost Ratios
• The company incurred a net profit of INR ‐ mn both in FY 2010 and Operating costs (% of Sales) i i1 i2 i3 i4
INR ‐ mn in FY 2009 Administration costs (% of
j j1 j2 j3 j4
• The company reported total Income of INR ‐ mn in FY 2010, Sales)
registering an increase of p1% over FY 2009
registering an increase of p1% over FY 2009 Interest costs (% of Sales)
Interest costs (% of Sales) k k1 k2 k3 k4
Liquidity Ratios
• The company earned an operating margin of p2% in FY 2010 a
Current Ratio l l1 l2 l3 l4
decrease of ‐‐ percentage points over FY 2009
Cash Ratio m m1 m2 m3 m4
• The company reported debt to equity ratio of ‐ in FY 2010, a Leverage Ratios
decrease of p3% over FY 2009 Debt to Equity Ratio n n1 n2 n3 n4
Key Financial Performance Indicators Debt to Capital Ratio o o1 o2 o3 o4
Interest Coverage Ratio p p1 p2 p3 p4
Indicators Value (dd/mm/yyyy) Efficiency Ratios
Market Capitalization (INR) A1 Fixed Asset Turnover q q1 q2 q3 q4
Total Enterprise Value (INR) Asset Turnover r r1 r2 r3 r4
A2
EPS (INR)
EPS (INR) Current Asset Turnover
Current Asset Turnover s s1 s2 s3 s4
A3
Working Capital Turnover t t1 t2 t3 t4
PE Ratio (Absolute) A4
Capital Employed Turnover u u1 u2 u3 u4
Source: Improved Decline
BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 10

11. Public: Foreign Company – Company 1 (3/4)
Key Business Segments Key Geographic Segments
100%
100%
80%
60%
100% 100%
50% 40%
20%
0% 0%
20‐‐ 20‐‐
Key Recent Developments
Description News
• Compnay1 has presence across India with ‐ manufacturing facilities and ‐ branch offices
• Operates as a subsidiary of ABC
• Is considered as one of India’s ‘Recognition 1’ and ‘ Recognition 2’
Business Operations
• Has announced establishment of its first ‐ facility in India in 2010 which is slated to be
operational in 2012
• Employs k1 people directly and more than k2 indirectly in India
Employs k1 people directly and more than k2 indirectly in India
Source:
BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 11

12. Private: Foreign Company – Company 1 (1/4)
Company Information
SAMPLE
Offices and Centres – India
Place 1, Country 1
Corporate Address
Tel No. +123456
Fax No. N.A.
www.abc.com/index.html
Website
b
City
Year of Incorporation 19‐‐
Products and Services
Products and Services
Category Products/Services Head Office
Category 1 Product 1 Key People
Name
N Designation
D i ti
Category 2 Product 2
Person 1 D1
Category 3 Product 3
Person 2 D2
Category 4 Product 4
Person 3 D3
Person 4 D4
Source:
BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 12

13. Private: Foreign Company – Company 1 (2/4)
Financial Snapshot
i i lS h Key Ratios
K i
y‐o‐y change
Total Income Particulars 2010 2009 2008 2007
Total Income Profit (2010‐09)
INR mn Profit / Loss INR mn Profitability Ratios
30,000 2,500 Operating Margin a a1 a2 a3 a4
P Net Margin b b1 b2 b3 b4
25,000 0 2,000
N Profit Before Tax Margin c c1 c2 c3 c4
20,000
1,500 Return on Equity d d1 d2 d3 d4
M
15,000 Return on Capital Employed e e1 e2 e3 e4
1,000 Return on Working Capital f f1 f2 f3 f4
10,000
500 Return on Assets g g1 g2 g3 g4
5,000
5 000
Return on Fixed Assets h h1 h2 h3 h4
0 0
Cost Ratios
2007 2008 2009 2010
Operating costs (% of Sales) i i1 i2 i3 i4
Administration costs (% of
j j1 j2 j3 j4
Financial Summary Sales)
Interest costs (% of Sales)
Interest costs (% of Sales) k k1 k2 k3 k4
• Company incurred a net profit of INR ‐‐ mn in FY 2010, as Liquidity Ratios
compared to net profit of INR ‐‐ mn in FY 2009 Current Ratio l l1 l2 l3 l4
Cash Ratio m m1 m2 m3 m4
• It reported total Income of INR ‐‐ mn in FY 2010, Leverage Ratios
registering an increase of p4% over FY 2009 Debt to Equity Ratio n n1 n2 n3 n4
Debt to Capital Ratio o o1 o2 o3 o4
• Earned an operating margin of p5% in FY 2010 a decrease Interest Coverage Ratio p p1 p2 p3 p4
of ‐‐ percentage points over FY 2009 Efficiency Ratios
• The company reported debt to equity ratio of ‐‐ in FY Fixed Asset Turnover q q1 q2 q3 q4
2010, a decrease of p6% over FY 2009 Asset Turnover r r1 r2 r3 r4
Current Asset Turnover
Current Asset Turnover s s1 s2 s3 s4
Working Capital Turnover t t1 t2 t3 t4
Capital Employed Turnover u u1 u2 u3 u4
Source: Improved Decline
BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 13

14. Private: Foreign Company – Company 1 (3/4)
Key Recent Developments
Description News
• It has ‐ company‐owned manufacturing facilities at place 1 place 2 place 3 place 4 place
It has ‐ company‐owned manufacturing facilities at place 1, place 2, place 3, place 4, place
Manufacturing 5 and place 6 and ‐ sales offices in place 7, place 8, place 9 and place 10
• In 2010, it was acquired by player 1 in an INR ‐‐ bn acquisition and has been functioning as
Acquisition
an operating subsidiary
• Its ‘Product 1’ is considered to be the ‘T1 Standard’ for chocolates in India
• Sales for the period between Jan‐Sept grew t2% in India
• Company has witnessed this t3% growth compared to a growth of t4% each year before
Business Operations
Business Operations 2009 and over t5% in 2010
2009 and over t5% in 2010
• It spent INR ‐‐ bn on selling and distribution in the year 2010, registering a t6% higher
allotment than that of the previous year
• It has increased its direct reach to consumers by t7% in 2011
• It has pioneered cocoa cultivation in India since the time of 19‐‐
Miscellaneous • Has also worked with U1 University in projects related to cocoa research and released
clones and hybrids that help in improving cocoa yield
Source:
BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 14

15. Private: Foreign Company – Company 1 (4/4)
Key Recent Developments
Description News
• It has won the ‘Z1 Award’ for its ‘C1’ campaign
It has won the Z1 Award for its C1 campaign
• Has won Z2 Awards
Awards
• It won Z3 awards
• Has won Z4 Awards 2011
Has won Z4 Awards 2011
Source:
BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 15

16. Thank you for the attention
The Branded Chocolate Market ‐ India report is part of Food & Beverage Industry Series.
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BRANDED CHOCOLATE MARKET IN INDIA 2012.PPT 16