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India ‘defying the odds’ as a fast growing chocolate confectionery market, Mintel

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Douglas Yu

By Douglas Yu+

02-May-2017
Last updated on 02-May-2017 at 12:34 GMT2017-05-02T12:34:28Z

India is one of the biggest chocolate markets globally in 2016 in terms of volume sales. Photo: ©iStock/Marcio Silva
India is one of the biggest chocolate markets globally in 2016 in terms of volume sales. Photo: ©iStock/Marcio Silva

Mintel has revealed India is “defying the odds” as one of the world’s fastest growing chocolate confectionery markets, while the global market posts slow growth in recent years.

Sales of chocolate confectionery in retail markets grew by 13% between 2015 and 2016 in India, followed by Poland, which saw sales growth of 2%, Mintel data showed.

India and Poland were the only two countries to see sales of chocolate growth in 2016, with sales in the US, UK, Germany and France flat over this period, while sales fell in Russia (-2%), Brazil (-6%), and China (-6%), according to Mintel.

Data from Mintel also revealed that India’s chocolate confectionery market has had a strong CAGR of 19.9%, in retail market value, between 2011 and 2015, and is expected to grow at a CAGR of 20.6% from 2016 to 2020.

In terms of volume sales, India consumed 228,000 tons worth of chocolate in 2016, compared to France (251,000 tons), Brazil (236,000 tons), and China (202,000 tons), Mintel said.

Meanwhile, Australia and Indonesia consumed 95,000 tons and 94,000 tons worth of chocolate in 2016 respectively.

Chocolate makers saw growth

Some of the major chocolate companies, including Mondelēz and Hershey, have seen revenue growth in 2016 despite the demonetization made by India, according to their most recent quarterly earnings results.

Mondelēz’s organic net revenue increased 0.6% during full year 2016, tempered by a negative impact of 60 basis points from India demonetization, while Hershey ’s India business grew by 20% in Q4.

In Q1 2017, Hershey’s constant currency net sales in India increased by 16% driven by the company’s investment in its branded syrup, spreads, milk booster as well as the introduction of Brookside chocolate brand, ConfectioneryNews recently reported.

What’s driving the growth of India’s chocolate market?

Health benefits and convenience are the key reasons behind the growth of India’s chocolate confectionery market in both value and volume, Mintel’s director of insights, Marcia Mogelonsky, said.

On the benefits of chocolates, Mintel research shows over two in five Indian consumers (44%) find sweet or sugary snacks like chocolates and cakes to be healthy, while over one in three (35%) Indians believe these snacks provide them with energy.

Meanwhile, as many as one in two (49%) Indian consumers associate sweet or sugary snacks like chocolates with convenience, Mintel added.

“Data from Mintel also reveals 43% of Indians consume sweet or sugary snacks like chocolate and cake between lunch and dinner, with over half (53%) of Indian consumers reporting that they tend to snack in between meals because they get hungry,” Mogelonsky said.

Additionally, as many as 19% of Indian consumers would like to see a wider variety of organic and natural snacks that have no additives or preservatives, according to Mintel.

“As interest in healthy sweets continues to rise, the availability of chocolate that offers organic or all natural positioning will be desirable as consumers look for better-for-you options," Mogelonsky said.

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