New Delhi, Nov 12 (IBNS) Ahead of the festivals, demand for chocolates is steadily increasing in the range of 45% majority in cities like Ahemdabad, Bangalore, Delhi, Mumbai, Chennai, Kolkata, Hyderabad, Cochin, etc. as the corporates and others are using it as gifts, reveals the ASSOCHAM survey.
While releasing the ASSOCHAM Survey on "Traditional Sweets vs Chocolates demand during festivals", D S Rawat ASSOCHAM, Secretary General ASSOCHAM, said that with an increase in use of adulterated mawa and other milk products by mithaiwallas in city, Delhiites have turned to chocolates to satiate their love for sweets.
Wary of the quality of traditional sweets available in the market this Diwali, people have been flooding chocolates boutiques with gift orders, which have been increasing as Diwali gets closer.
Major metropolitan cities in which respondents were interviewed by ASSOCHAM Social Development Foundation (ASDF) include Delhi, Mumbai, Ahemdabad, Cochin, Bangalore, Hyderabad, Indore, Patna, Pune, Chandigarh and Dehradun and it was observed that there has been a surprising rise in the demand of chocolates in the Indian market all this is because the lifestyle of people changed drastically and also rising awareness about adulterated and high-priced traditional sweets available in the market. Similar findings were observed in Chennai and Chandigarh.
Majority of confectioners confess that the increase in demand for chocolates is primarily due to increasing adulteration. They also attribute it to the narrowing gap difference between tradition and modernity.
About 86% of chocolate wholesaler's owners said the demand has gone up with each passing year.
Since the past two or three years there has been a lot of interest in branded and sugar free chocolates during the festive season. Bulk orders from big companies who gift chocolate boxes to their employees or vendors.
With changing lifestyles and their youth appeal, chocolates have also emerged as a good choice for gifting purposes. A box of chocolates costs lesser than the kaju barfi and is liked by all. Also, it has many options of imported as well as dry fruits chocolates," said Rawat.
Over 82% of the confectioners said that the industry caters to a variety of consumers with over 65 per cent of the consumption being in the urban market. However, over the years, chocolate is increasingly becoming popular among Indians and gradually replacing traditional sweets.
Nearly 76% of the confectioners said demand for designer chocolates, handmade truffles, ganaches and solid chocolates of different types and exotic flavours have been at an all-time high.
Chocolate sellers said, the quantity of chocolates sold in this duration was way more that what was sold in past three months and this diwali, received bulk orders from corporates also.
Chocolates competing with other categories like soft drinks, snacks and beverages for a share of the consumer´s wallet, but modern trade and other factors like liberalisation of the economy, growing income of middle class and macro-economic conditions have had a positive impact on consumer spending," said Rawat.
The per-capita consumption of chocolates has also increased from 50gm in 2005 to 300 gm now and there is a lot of scope to grow even further, adds the Secretary General.
The consumption of chocolates is steadily increasing in urban and semi urban areas, registering a compound annual growth rate (CAGR) of 25% and is expected to cross Rs 7,500 crore by 2015, according to the estimates by apex industry body ASSOCHAM.
The Indian Chocolate market is currently poised at over Rs 4,500 crore.
"The major key challenges that the chocolate market is facing in India are inflationary pressures on raw material prices, lack of government initiative, high entry barriers due to duopolistic market and price-sensitive consumer," said majority of wholesalers.
Facts & Figures
Chocolate market is estimated to be around 4,500 crores growing at 25% per annum
Cadbury is the market leader with 70% market share
The per capita consumption of chocolate in India is 300 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
Margins in the chocolate industry range between 10 and 20 per cent, depending on the price point at which the product is placed
Chocolate sales have risen by 15% in 2007 to reach 40,000 tonnes
The global chocolate market is worth $85 billion annually
Mithai- the traditional Indian sweats is getting expensive and substituted by chocolates among upwardly mobile Indians. Instead of buying sweats on Raksha Bandhan, Diwali, people prefer to buy chocolates.
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 use to be unaffordable, is now considered mid-priced.
Designer chocolates have become status symbols.
Key drivers for Chocolates market in India are
Tradition of gifting sweets
Shifting in consumer preference (from traditional 'mithai' to chocolates)
Increasing awareness - demand for sugar-free and diet chocolates among consumers
Expansion potential due to lesser penetration
Rising income levels and rapid development in rural markets
However, there is a long way to go for the Indian chocolate industry. Increasing awareness, rising disposable income, shifting in Indian consumer preference, and rapid development in rural markets shows there is a huge untapped market that the chocolate manufactures can capture.