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Branded Chocolate - India

December 2008
Executive Summary

 Estimated worth USD XX mn in 2008 & USD YY mn in 2009


 a% of products sold are priced in INR X – Y range
Market
 Profit Margins range between a – b%

E
 Drivers: Opportunity to expand due to low penetration, strong tradition of gifting sweets,
Drivers &
Challenges
PL
attractive pricing driving volumes, demand from new segments
 Challenges: Inflationary pressures on raw material prices, lack of government initiative, and
duopolistic element of the market

SAM
 Changing palate of consumers from Indian sweets to chocolate
 Growing distributional channels
Trends  Foreign brands targeting a niche premium segment
 Major retailers foraying into the industry

 Market is dominated by A and B


Competition  X and Y are other domestic players
 Foreign players in the market are U and V, catering only to the premium segment

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•Market Overview
•Drivers & Challenges
•Trends
•Competition
•Key Developments

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The branded chocolate market is growing with the bulk of sales
concentrated in mid-price range products
Overview Size and growth (estimates)
•Chocolate represents approximately c% of the USD mn
confectionary market in India with the rest 400
b% Z
accounted by sugar confectionary
300
•Industry estimated to be worth approximately a%
Y
USD XX mn in 2008

PLE
•Market is expected to grow to approximately
USD YY mn in 2009
200

100

0
X

Characteristics
SAM
•Urban markets account for the major share
2003

Price points and consumption


Price points (INR) vs. sales
2006 2009

Consumption
and also for a higher penetration rate of ~a%
2 u%
•Various price points exist with the mass Rural
market existing in INR 2 – INR 10 range b%
5 - 10 v%
•Profit margins range between u – v% based on
a%
the price point of the product Other Urban
w%

Source:

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Drivers & Challenges

Challenges

Drivers Soaring price of raw materials


Sweet taste preference in an under-
penetrated market High excise and import duties

Tradition of gifting sweets High entry barriers due to duopolistic


market
Attractive pricing

Innovation through brand and product


variants

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Key Trends

Shift in consumer preferences Channel Trends


Driven by marketing initiatives, consumer Independent retailers are the largest channel
preferences are slowly changing in favour of but modern retail is growing faster
chocolate

Trends

Foreign brands target premium market Possibility of private labels


Foreign or imported brands are successfully Retailers may launch their own chocolate
targeting the lucrative premium segment in brands in a bid to grow their private label sales
urban markets

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X is the market leader followed by Y, which dominate the market
with a collective share of more than a%
Major Players Estimated Market Share
• X is the leading player
 X is planning to increase sales by a-b% by 20-- Company Y
 Y accounts for over a% of the market b%
 Z and other chocolate wafers constitute b% of the total

E
chocolate market and have been growing at c% annually Others
c%

L
d% Imported
• Recent foreign players in the market

• Other domestic companies are Y and Z


MP
 U in a JV with V , and W currently catering to the premium
segment only
a%

A
Company X

Parameter
Revenue
X
INR XX crore(20--)
S Y
INR YY crore (20--)
Market Size a% b%
Price range INR x-y INR y-z

Brands A,B,C,D U,V,W

Source:

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