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. The market leader is Cadbury
with a lion's share of 70 percent. Tillthe early 90s, Cadbury had a market share of over 80 percent, but its party was spoiledwhen Nestle
appeared on the scene. The Gujarat Co-operative Milk Marketing Federation(GCMMF) and Central Arecanut and Cocoa Manufactures and Processors Co-operative(CAMPCO) are the other companies operating in this segment. Competition in thesegment will get keener as overseas chocolate giants Hershey's and Mars consolidate tograb a bite of the Indian chocolate pie.INDIA, stands nowhere even near to these countries when compared in terms of Per Capita Chocolate Consumption. The Indian chocolate industry is extremely fragmentedwith a range of products catering to a variety of consumers. We have the bars/slabs, jellies,lollipops, toffees and sugar candies. Given India's mammoth population, it comes as asurprise that per capita chocolate consumption in the country is dismally low - a mere 20gms per Indian. Compare this to over 7 kgs in most developed nations.However, Indians consumed 22,000 tones of chocolate last year and consumption isgrowing at 10-12 percent annually. The market size of chocolates was estimated to bearound 16,000 tones, valued around Rs.4.16 billion in 1998. Volume growth which wasover 20% pa in the 3 years preceding 1998, slowed down thereafter.Both chocolate and sugar confectioneries have abysmally low penetration levels, infact, even lower than biscuits, which reach 56 per cent of the households. Market growthin the chocolate segment has hovered between 10 to 20%. In the last five years, thecategory has grown by 14-15% on an average and will expect it to continue growing at asimilar rate in the next five years.Per capita consumption of chocolates in India is minuscule at 20gms in India ascompared to around 5-8 kgs and 8-10 kgs respectively in most European countries.Awareness about chocolates is very high in urban areas at over 95%.The launch of lower-priced, smaller bars of chocolate in the last two years and positioning of chocolate as a substitute to traditional sweets during festivals, have boosted consumption.
This is also because chocolate, which was considered to be an elitist food,has caught the fancy of buyers looking for a lifestyle item at affordable cost.A study had projected that sales of the Indian chocolate industry would rise from$125/$130 million in 1998 to $175/$180 million by the year 2000 and to $450 million bythe year 2005 which ACTUALLY happened irrespective of various negative factors AC Nielsen ORG Marg report estimates the Indian Chocolate Industry’ worth at Rs 2,000-crore (Rs 20 billion)
Chocolate Consumption Structure - 2004
Therefore themilk fat content in Indian chocolates is lesser than that of European chocolates and hencethey taste different. white spots appear on Chocolates sometimes. 350 Cr. 1600 Cr. the fat expression happens on the surfaceof the chocolate.Children 55% Adults 12% Young Adults 33% Chocolate & Confectionery Market of India . 'This means white spots emerge on the surface of the chocolate.2004 Chocolate Counts Rs. Sometimes. 13% Sugar Boiled Confectionery Rs. . This phenomenon is called 'fat bloom' . Is that safe? When a chocolate gets exposed to temperature variances from a hot day to a coldnight (which is very common all across India). 250 Cr. 10% Chocolate Bar Rs. It is entirely safe to consume chocolates however thefeel and the taste of the chocolate may not be the same as is originally intended to. To prevent the chocolate from melting and to enable shape retention under such hightemperatures the recipe of the chocolate is adapted to the Indian climate. 63% INTERESTING CHOCOLATE FACTS:-Why is Chocolate in India different than most European chocolates? The temperatures in India are much higher than that of the European countries. 325 Cr. 14% Mints & Chewing gums Rs.
Dark chocolate contains flavanoids. Chocolates right now reaches about 70mnto 75mn consumers.Are chocolates available for diabetics? Currently in India no manufacturer produces chocolates for diabetics. It is estimated that chocolates have a potential market of about 116mnconsumers. a normal byproduct of metabolism. However the Indian market is still untapped and provides immense scope for growth. high prices and domestic production problems will provide the main problems to market growth. House-wives from elite class usually indulge in this kindof business. it is even lower. and scientific researchsuggests they do good things to blood vessels.Chocolate consumption in India is extremely low. ABOUT HOME – MADE CHOCOLATES:Another area of chocolate industry in India is HOME-MADE CHOCOLATES. are available in certain parts of theworld. As these markets develop. Chocolate: the new solution for blood pressure? Cocoa beans have antioxidant compounds called flavanols. Per capita consumption is around160gms in the urban areas. compared to 8-10kg in the developed countries. Somehome-made chocolate manufacturers manufacture really attractive GIFT CHOCOLATES. Hence per capita consumption has a immense scope for improvement.In the past five years. the chocolate business grown by 14-15% on an average and isexpected to grow further for at least next five years. The per capitachocolate consumption in India is still much below the East Asian standards. as thegovernment regulations do not permit manufacture of such chocolates. anantioxidant which helps the body by neutralizing potentially cell-damaging substancesknown as oxygen-free radicals. Thissegment is highly fragmented and operates independently. They are more pronounced for manufacturing distinct flavors and varieties of chocolates in various shapes and size. But. In rural areas.Chocolates in India are consumed as indulgence and not as a snack food. The industrymajors are liaising with the government authorities to enable manufacture of suchchocolates in India. Changing Attitudes & Consumption pattern: . prices will fall making these products more accessible to the wider population. bothgeographically as well as product basket wise.these chocolates are usually priced at a higher price than that available for branded products for the same quantity. They usually operate in local area and through their contact network. GROWTH OPPORTUNITIES IN INDIAN CHOCOLATE INDUSTRY:Untapped Market & Limited Consumption: The fact that chocolate is not a traditional food. Chocolates for diabetics. though.
chocolate consumption had been restricted by low purchasing power inthe market. . while expanding the reach of its products. All the above points bring us to aconclusion that there’s an immense scope for growth of chocolate industry in India notonly in its offering pattern but also for increment in its total consumption value and size. Chocolates which were considered to be an elitist food hit the fancyof masses looking for change in life style at affordable cost.But with the launch of lower-priced. as a superior destination for manufacturing best practices.Manufacturers are finding an increasing number of curious customers who're pampering their taste-buds to apricot and peach chocolate. any one will be gripped by this fever. wherethree-fourths of the population does not even know the product. Companies should look at new avenues. have boosted consumption.It’s a world of chocolates where the flavour of Jamaican rum truffle melts in your mouth even as your hand reaches out greedily for a kiwi-flavoured concoction or whereroasted almonds are a delight to eat while your mind flirts with hazelnut praline. Chocolate Boutiques are a complete chocoholicexperience. Surrounded on all sides by scrumptious chocolates wrapped neatly incolourful foil and paper. Companies need to reach out to smaller towns.Distribution will hold the key. Rural expansion: Rural market and small town markets are seen as the key to spurring double-digitgrowth. Chocolates and other cocoa-based snack foods were looked upon as foodsuitable only for elitist consumption till recently.In the past. Strategies for Growth & Success in India Revamp the product to keep the excitement alive. and for BPO opportunities. Products such as liquid chocolate packs from the existing portfolio are expected toenable rapid acceptance. Merger & Acquisitions: Mergers & Acquisitions with companies that match the product portfolio & overall growth strategy should be considered which will notonly strengthen the company to establish a stronger hold in the country but alsoward off possible competition in the select category. smaller bars of chocolate in the last two yearsand positioning of chocolate as a substitute to traditional sweets during festivals. Such collaborations will alsofacilitate companies to use each other’s distribution networks. Chocolate Boutiques & Designer Chocolates They call it 'choco fever'. Leverage India for offshoring : India is being leveraged for export of finished goods.
These are usually bought by corporates or individuals who want to make aspecial statement. X'mas figurines and animals -. 2. 6. Apart from the festive season.000 varieties of designs to choose from -. most of which costs between Rs 500 and Rs 2.5 percent of annual sales of Rs. and champagne and Jamaican rum truffles are alsodemanded in the market. whereas chocolate starts melting at body temperature (about 37-38degrees) . From logos to company names being embossed in chocolates of different shapes and colours. Nestle and Cadbury have tried to provide loans for retailers to buy fridges.With the rise in disposable incomes. animal figurines coloured in metallic hues and glitter. lace andsatin-draped boxes being in heavy demand. gold foils and brocade.Designer chocolates are tailored for customers who're looking at gifting chocolateswith a personalized touch. product launches. low fat and sugar ones are quite popular.and nearly 50 kinds of gift packaging available tosuit any particular occasion.For the more adventurous. Embossing of names. Chocolate enterprise in general loses 1.There are 1. there are also chocolates with pan-supari. Air-condition supermarketsare rare.8 billion o heat damage. these are all in demand. some unique flavors liketamarind and chilli chocolates. cardamom flavoursand liqueur filling.Manufacturers have to take precautionary measures to ensure the preservation of chocolates especially in summer. Companies revise ingredients to make chocolate withstand heat. Manufacturers are now luring their patronswith chocolates in geometric shapes. hese manufacturers also cater to the older and the health-conscious choco-lovers. UNAVAILABILITY OF CONTROLLED REFRIGERATION: India does not have controlled refrigerated distribution. logos of companies and personalizedmessage on the chocolates are fast becoming popular.strawberry chocolate or better still wild berry in cognac flavoured chocolate.weddings and baby announcements also see heavy offtake of premium sweet delicacies.ranging from good luck charms. THREATS IN THE CHOCOLATE INDUSTRY:-1. but tohold down power costs the shopkeepers switch off the . The temperatures can reach as high as 48degrees in summers. newemployee joinings and management training programmes. Few chocolatemakers cater only to corporate clients for festive occasions.the high fibre. people do not mind spending on designer chocolates. and soIndian chocolates are more resilient to heat than Eurupean chocolates by a factor of 2degrees.500 per kg. TEMPERATURE: A peculiar problem that hinders the distribution to far-off places is the tendency of chocolates to melt under even moderate heat. The packaging of these products includes materials like imported mesh.For those who are health conscious there is also a special range of sugar-free and dietchocolates. Products like nut-based praline chocolates.These designer chocolates focus a lot of attention on packaging.
Usually.However. These are not only of low quality. TRANSPORTATION: Chocolate needs to be distributed directly. prefer these imported chocolates. 5. Electricity costs money and is not provided in a uniform way. the cocoa fat solidifies and turns white. which are mainlyagricultural in nature. but thatdidn't quite do the trick. Hence consumers who are willing to spend alittle more. soon and off the electricity goes and the product may suffer sometimes 3.Small coolers were provided to retailers to keep the chocolate from melting. Government policies . up from $900 a year back. Raw material prices have significant influence on margins. etc of inferior brand of imported chocolates. The price of cocoa has been hitting a new highof late. as these cater to a small niche market. Building such a direct network in rural areas is adaunting task since the infrastructure is poor in India in rural areas. these imported chocolates taste better thandomestic chocolate due to recipe difference. However there is a lot of dumping from neighboring countries like Dubai. When the cooling isswitched on in the morning. THREAT FROM IMPORTED BRANDS: Free availability of imported brands bought through illegal routes pose a threat tothe domestic chocolate industry. As a result thecocoa fat melts and migrates to the main body of the chocolate bar. presenting a bizarre.fridges at night. FACTORS AFFECTING THE GROWTH OF CHOCOLATE INDUSTRY ININDIA:- Good monsoon ensures adequate availability of raw materials. India does not produce cocoa to any noteworthy extent but is a large consumer of chocolates. which come through official channels.un-sellable white on black form. 4. Cocoa prices are at a near 20-year high at $2358 per ton. Most of the cheap chocolate brands that are available do not meet Indian FoodRegulations. has been growing. do not pose athreat to the market. the premium brands. but are brought very near to their expirydates. RAW MATERIALS: Cocoa is the key raw material and accounts for around 35% of the total materialcost (including packaging) of chocolates. especially amongthe middle class. Nepal. Consumption of chocolates and other cocoabased products. 90% of our products are sold directly to retailers. unlike other FMCG products.
cocoa) expensive. however it also makes import of raw material (esp.in terms of licensing. Rupee depreciation improves export realizations. etc all influence the business. time lag for a productlaunches. Market growth driven by overall economic growth and urbanization alsocontributes. BUSINESS MODEL:- . An overall booming economy will consume tonnes of chocolates because consumer spending increases. also affect the introduction of products. Also. duties. taxes. movement of agriculturalcommodities etc. the absolute number of consumers inmiddle class & upper middle class increases. excise.
elache. COMPETITIVE ADVANTAGE The competitive edge in our business is to provide a unique product with a center filledsoft chocolate and also to provide seasoned chocolates with spices like cardamom. dealers providing raw materials.system marketing. finance and human resource management.OFFER/VALUE PROPOSITION Our area of business deals with semi finished chocolates and raw chocolates. DELIVERY CHANNEL We prefer direct marketing as delivery channel by which we have a direct contact with thehotels and can deliver the product in prompt timings. PARTNER NETWORK In order to succeed in the current business a strong relation is maintained with other co partners like the logistics.discounts are given to the customers even at the off seasons. REVENUE MODEL We prefer to have cash and carry method for receiving revenue but when bulk orders are placed 75 % are paid as cash and 25 % a CORE CAPABILITY We the partners in our business are versatile in various fields like production. The need of chocolates in hotel is in largedemand. The reasonfor selecting this is due to the need in the hotels and also as a gift item for the corporate. COST METHOD . operations. though the making of it is easy the handling the same becomes hard. This versatility makes usexcel our self in our business. TARGET CUSTOMERS Our target customers are hotels and corporate. pepper and other Indian spices. RELATIONSHIP BUILDING In order to build a strong relationship with the customers and to maintain a strong bond. mechanics dealing with themachinery and the others relating to the business.
To havean edge compared to the competitors an unique characteristics has to added with theexisting products like the centre filling etc. SEGMENT ATRACTIVENESS By segmenting the work and concentrating on a particular field further innovation can beimplemented this in turn can result in production of bulk output with the automatedmachines and delivering the same through the delivery channel.As mentioned already we are using automated machines in our business to yieldhigher profit our basic investment is for the machines in the form of fixed asset. INDUSTRY ATTRACTIVENESS As the chocolate industry is in growth trend. and therest of the investment will be for the avenue where our project is going to be estabilishedand on the human resources. we are expecting to have a high demand for the chocolates in the future. maintenanceof the available machinery and other related works a proper and well maintained.. VISSION / RISK TAKING ABILITY All the steps taken should always lead to the success path of the organization aiming toreach the vision by setting out small goals. CRITICAL SUCCESS FACTOR The USP of our business and the various other uniqueness like using of automatedmachine and use of natural species makes us exhibit among our competitors and results asa critical success factor. ANALYSIS OF BUSINESS PLAN:- MARKET ATTRACTIVENESS As the investment in the chocolate industry in low and at the same time the return from theindustry is high. SUSTAINABLE ADVANTAGE Reasonable time maintenance has to be done with in to achieve the requirements. it finds an attractive market for our business to start. As said by themanagement gurus that the best way the start a business to have a minimum investment again maximum returns from it. CONNECTEDNESS IN SCM In order to meet out with various requirements like acquiring raw materials . . Since the demand is high we find the market very attractive tostart up the business and excel in it. And the risk taking ability and focus to achievesuccess results in reaching out with the vision .
TEMPERATURE: A peculiar problem that hinders the distribution to far-off places is the tendency of chocolates to melt under even moderate heat. These are usually bought by corporates or individuals who want to make aspecial statement. From logos to company names being embossed in chocolates of different shapes and colours.weddings and baby announcements also see heavy offtake of premium sweet delicacies. Chocolate enterprise in general loses 1.With the rise in disposable incomes. UNAVAILABILITY OF CONTROLLED REFRIGERATION: India does not have controlled refrigerated distribution.and nearly 50 kinds of gift packaging available tosuit any particular occasion.These designer chocolates focus a lot of attention on packaging. 6. logos of companies and personalizedmessage on the chocolates are fast becoming popular. whereas chocolate starts melting at body temperature (about 37-38degrees) . Few chocolatemakers cater only to corporate clients for festive occasions.For those who are health conscious there is also a special range of sugar-free and dietchocolates. newemployee joinings and management training programmes.5 percent of annual sales of Rs. these are all in demand.There are 1. Companies revise ingredients to make chocolate withstand heat. most of which costs between Rs 500 and Rs 2. Air-condition supermarketsare rare. Embossing of names. As a result thecocoa fat melts and migrates to the main body of the chocolate bar. product launches.Designer chocolates are tailored for customers who're looking at gifting chocolateswith a personalized touch. Nestle and Cadbury have tried to provide loans for retailers to buy fridges. The packaging of these products includes materials like imported mesh. gold foils and brocade. X'mas figurines and animals -.8 billion to heat damage. lace andsatin-draped boxes being in heavy demand.the high fibre.These manufacturers also cater to the older and the health-conscious choco-lovers.500 per kg. but tohold down power costs the shopkeepers switch off the fridges at night. Apart from the festive season.ranging from good luck charms. people do not mind spending on designer chocolates. 2. The temperatures can reach as high as 48degrees in summers.000 varieties of designs to choose from -. and soIndian chocolates are more resilient to heat than Eurupean chocolates by a factor of 2degrees. low fat and sugar ones are quite popular. THREATS IN THE CHOCOLATE INDUSTRY:-1.Manufacturers have to take precautionary measures to ensure the preservation of chocolates especially in summer. .
However. Electricity costs money and is not provided in a uniform way. RAW MATERIALS: Cocoa is the key raw material and accounts for around 35% of the total materialcost (including packaging) of chocolates. Consumption of chocolates and other cocoabased products. the cocoa fat solidifies and turns white. India does not produce cocoa to any noteworthy extent but is a large consumer of chocolates. FACTORS AFFECTING THE GROWTH OF CHOCOLATE INDUSTRY ININDIA:- Good monsoon ensures adequate availability of raw materials. Most of the cheap chocolate brands that are available do not meet Indian FoodRegulations. TRANSPORTATION: Chocolate needs to be distributed directly. but are brought very near to their expirydates. prefer these imported chocolates. THREAT FROM IMPORTED BRANDS: Free availability of imported brands bought through illegal routes pose a threat tothe domestic chocolate industry. do not pose athreat to the market. presenting a bizarre. up from $900 a year back. has been growing. Cocoa prices are at a near 20-year high at $2358 per ton. etc of inferior brand of imported chocolates. These are not only of low quality. Building such a direct network in rural areas is adaunting task since the infrastructure is poor in India in rural areas. 4. which are mainlyagricultural in nature. unlike other FMCG products. soon and off the electricity goes and the product may suffer sometimes 3. which come through official channels.Small coolers were provided to retailers to keep the chocolate from melting. the premium brands. especially amongthe middle class. Nepal.un-sellable white on black form. 90% of our products are sold directly to retailers.When the cooling isswitched on in the morning. Raw material prices have significant influence on margins. 5. Hence consumers who are willing to spend alittle more. The price of cocoa has been hitting a new highof late. However there is a lot of dumping from neighboring countries like Dubai. as these cater to a small niche market. but thatdidn't quite do the trick. these imported chocolates taste better thandomestic chocolate due to recipe difference. Usually. Government policies .
etc all influence the business. Market growth driven by overall economic growth and urbanization alsocontributes. excise. Also. the joint venture with General Mills) Cheerios Chocapic Golden Nuggets Nestle Fitness Nesquik Shreddies Trix Baby food Cerelac Milkshakes and other . also affect the introduction of products. the absolute number of consumers inmiddle class & upper middle class increases. Rupee depreciation improves export realizations. time lag for a productlaunches. Coffee and tea Coffee mate Dolce Gusto Nescafé Nespresso Nestea and Enviga (controlled by the joint venture with The Coca-Cola Company. called Beverage Partners Worldwide) Ricoré Sweet Leaf Tea Ice cream Extrême Dreyer's Drumstick Häagen-Dazs Maxibon Mövenpick Ice Cream Parlour (acquired from Ault Foods and rebranded from Sealtest) Mega Kimy (Philippines only) Bottled water (Nestlé Waters) Aquarel Arrowhead Water Contrex Deer Park Spring Water Perrier Poland Spring Nestlé Pure Life San Pellegrino Vittel Ozarka Breakfast cereals (some distributed by Cereal Partners Worldwide. however it also makes import of raw material (esp. duties. An overall booming economy will consume tonnes of chocolates because consumer spending increases.in terms of licensing. cocoa) expensive. taxes. movement of agriculturalcommodities etc.
7% of the shares of L'Oréal. Its brands including Garnier.beverages Carnation (now part of Alaska Milk Corporation in the Philippines. SMA and Promil (acquired from Pfizer Inc. Maybelline. soups and sauces (Nestlé Professional) Buitoni Davigel Maggi CHEF Frozen and refrigerated foods DiGiorno (pizza) Herta Hot Pockets Lean Cuisine Stouffer's Chocolate and confectionery Aero After Eight Baby Ruth Butterfinger Caramac Nestlé Crunch KitKat Lion Bar Galak/Milky Bar PowerBar Quality Street Rolo Rowntree products Smarties Wonka products Toffee Crisp Pet food (Nestlé Purina Pet Care) Dog Chow Felix Friskies Purina ONE Winalot Pharmaceutical products and active cosmetics (controlled by joint ventures with L'Oréal) Innéov Biotherm Galderma Performance and healthcare nutrition Boost PowerBar Life insurance Gerber Life Insurance Company As of year end 2010. the world's largest company in cosmetics and beauty. Nestlé held 29.) Seasonings. but under a long-term license agreement with Nestle) Caro Juicy Juice Milo Nesquik Ovaltine La Laitière (controlled by the joint venture with Lactalis) Gerber Nido S-26 Gold. and Lancôme as well as The .
L’Oréal holds 10.41% of the shares of Sanofi-Aventis. .Body Shop stores. the world's number 3 and Europe's number 1 pharmaceutical company.
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