Chocolates and Confectionery industry: expected to grow to over INR 50,000 Crore (CAGR of 10%) over the next 5 years

 

• Chocolates and Confectionery industry: expected to grow to over INR 50,000 Crore (CAGR of 10%) over the next 5 years
  
• The Chocolates and Confectionery industry is estimated to be over ~INR 34,000 Crore in size (consumer spends) with Chocolates accounting for around 58% of the industry and Confectionery accounting for 42%. 
• The industry is expected to grow to over INR 50,000 Crore (CAGR of 10%) over the next 5 years. 
• Chocolates category is dominated by international players (Mondelez, Nestle, Ferrero, Mars account for 85% share) with Indian companies starting to make headway in recent time, Amul being the largest player. 
• Confectionery, on the contrary, is more fragmented in nature with Top 12 companies accounting for 80% share and largest player having 25% share. 
• The category has large number of regional players having significant share in their respective strongholds.
  
• The chocolates category has seen significant premiumization in last few years, which has created a void in the affordable segment. 
• This presents a significant opportunity for the Company to create brands that will offer high quality at affordable price points. 
• Similarly, the confectionery category is fragmented with limited presence of national brands. 
• The Company has the opportunity to build brands at scale with presence across the country, through high quality products and omni channel distribution. 
• In the B2B space, the growing trend of home bakers and increasing consumption of chocolate-based products presents a massive opportunity, especially in the retail and HoReCa channels, which aim to tap into. 
• Increase in global cocoa prices have resulted in significant increase in the input costs, with the trend expected to continue in the foreseeable future. This is likely to impact consumer prices in the category which might impact volume growth. However, the outlook for value growth remains healthy.
  
• Outlook The business outlook for FY25-26 is positive with both value and volume expected to grow. 
• The focus remains on strengthening the B2B business while parallelly building presence in the B2C segment through omni channel distribution and portfolio encompassing products across key segment. 
• With global cocoa prices at all-time high, the industry will be impacted by significant shifts in consumer behaviour expected. In the short term, there is likely to be impact on volumes, while value growth will continue to be healthy. 
• In due course, there is likely to be increased pace of innovation, as manufacturers endeavour to deliver superior experiences while minimizing price inflation.