An Outlook to Indian Chocolate Industry: From Beans to Bars
Chocolate is wildly popular for individual consumption, as gifts and for the purposes of baking and cooking. Due to the dominance of large-scale production dynasties, franchises and small businesses tend to focus on unique or specialty items and services. The demand for cocoa is predicted to rise by 30% by 2020, the industry is all set to ignite for a country like India. The chocolate industry offers a wide variety of opportunities for the small business owners too. The industry growth will be driven by population growth as well as expansion into new markets, product innovation and rising disposable income levels leading to a greater purchasing of premium offerings.
Indian Demographics and Chocolate Industry
As far as India’s demographics is concerned, it is a country with very pronounced humid tropics suitable for cocoa plantations. In the early 70’s, the plantations were introduced as a mixed crop due to their commercial importance. They are cultivated in the southern states of India, albeit with not too much ease. Off the total cocoa production in our country, 1/3rd of it is produced singularly by Tamil Nadu.
A latest trend that has set its foot in the Indian market is the increasing demand for dark and sugar free chocolates. People are aware of the benefits of dark chocolate and have developed a taste for it. Hence, chocolate manufacturers are introducing medicinal and organic ingredients in their productions so as to remain active in the market.
There is a growing awareness for ingredients which takes care of wellness and there are various international certifications for such chocolates too.
Changing consumer preferences and lifestyles, eating habits, and their global exposure to international brands have led to higher sales for the Indian chocolate industry, which registered a growth of 15% per annum from 2008 to 2012 and is expected to grow at CAGR 23 % by volume between the years 2013-2018 and reach 3, 41, 609 tons according to a report ‘India Chocolate Market Forecast & Opportunities, 2018′ published by TechSci Research. The chocolate industry is usually segmented by the type of ingredients used to produce chocolates. This includes dark, milk and white chocolates. Milk chocolate is the most popular category contributing 75 % to the total sales of chocolates, followed by white chocolate – 16 % and dark chocolate – 9% , as stated in the report.
Often associated with high quality fine chocolate, bean-to-bar chocolate production requires the chocolate maker to be involved in the process from as early as fermenting and drying the cocoa beans.
The trends that could transform India’s chocolate industry :
- Eight markets drive 70% of the world’s confectionery growth. According to an International report, they are Brazil, China, Colombia, India, Russia, South Africa, Turkey and Vietnam.
- The most dramatic change in consumer taste is a surge in the popularity of chocolates, especially dark chocolates.
- Other important factors include: Premiumisation (demand for “moments of happiness”), Convenience (portion control), Value, Variety of Flavors (new combinations, nostalgia, artisanal ingredients), etc.
- An increase in investments by confectionery companies, governments and NGOs in cocoa farmer development programs.
- Digital technology could revolutionize the supply chain as 3D printing is a disruptive innovation that could change the behavior of companies and consumers.
- With obesity a global epidemic, the industry needs to assuage concern with healthier products that could transform the market for chocolate.