The region will also see ballooning volume sales due to a spread in organised retail, projects Datamonitor’s Market Insights: Confectionery in India report.
By 2014, India is projected to jump up from 19th to 25th place in the rank of global confectionery markets, claims the market research company.
The Indian market is predicted to grow to a value of $2.28bn by 2014, with a CAGR of 12.4 per cent during 2009-14.
Although the country currently has a low market value, the region has been growing at a much faster pace than leading countries such as the US, Germany, UK and Russia over the past few years.
During 2008–09, the Indian confectionery market had the second fastest global growth with a value increase of 12.2 per cent.
Chocolate and cereal bars are two of the fastest growing categories due partly to an increasing premiumisation trend, according to Datamonitor.
“Indian consumers are increasingly experimenting with new foods, and novelty consumption is on the rise as consumers are increasingly likely to treat themselves with earned “indulgences”,” said Datamonitor.
In 2010, new product launches were dominated by the sugar confectionery and chocolate category which together accounted for around 80 per cent of all launches.
Chocolate is the largest category in terms of value and is estimated to exhibit the second highest CAGR during 2009–14 among all categories, of 18.8 per cent.
However, per capita consumption of branded chocolate is extremely low, at around 100g.
Global confectionery giants such as Cadbury’s, Perfetti Van Melle, and Nestle are the key contributors to the pool of new product launches in the premium price range in the market.
“An analysis of the leading five manufacturers in terms of growth suggests that companies with a higher focus on chocolate products are performing relatively better than others,” said Datamonitor.
The leader in the Indian confectionery market, Cadbury, has a large brand depth, especially in the fast growing chocolate category and saw a value growth of 18.1 per cent during 2008–09. However, Perfetti Van Melle, which key brands focus on the slower-growing sugar confectionery category, saw a relatively sluggish growth of seven per cent over 2008-2009.
Cereal bar growth
In terms of growth prospects, cereal bars are expected to be the most promising confectionery category over the next few years, according to Datamonitor.
Increasing snacking/ eating on-the-go habits and a rising health consciousness trend will fuel the growth in this category, which is estimated to grow at a CAGR of 37.3 per cent over 2009–14.
Factors such as the rising number of diagnosed diabetics will push sales of confectionery products in India that are perceived to be healthier than traditionally available sweets, projects Datamonitor.
The number of diabetics in the country more than doubled from 19m in 1995 to 40.9m in 2007, and is further projected to increase to 69.9m by 2025.