Project Report On Chocolate
Project Report On Chocolate
Project Report On Chocolate
An Analytical Study of Chocolate Industry in India with Special Reference to Cadburys India is a sweet CHOCOLATE story of chocolates in the hot and humid plains of INDIA, which enlightens us about the size & status of chocolate industry in India. The project gives information about the competitors, their market share, and their product basket and highlights success features. The project also presents data on types & categories of chocolates, a brief study of chocolate manufacturing process The project also covers a brief study of Cadburys India Limited the biggest player in the Indian Chocolate Industry with reference to its presence, market share, product offerings, marketing strategies, strengths & weaknesses, success factors and Worm Controversy Management. Also, the implication of pricing, distribution strategies and impact of external environment has been recorded. The project throws light on problems and challenges of the Indian Chocolate Industry, growth opportunities and strategies to be adopted for growth in this industry. Finally, the project gives information about home-made chocolates and Chocolate Boutiques and the ways in which Indian consumers and Chocolate players are experimenting and innovating chocolates and giving the Indian Chocolate Industry a new sweetness.
Table of contents
Sr. No Topic Page No
1 Project Objective 6 2 An Overview of Chocolate Industry in India 8 3 Types of Chocolates 12 4 Categories of Chocolates & Form of Consumption 14 5 Chocolate Manufacturing Process 15 6 Market Size (by value & by volume) 16 7 Major Players & their Market Share 17 8 Cadburys India Limited A Study 18 9 Cadbury & The Worm Controversy 37 10 MARKETING - PROMOTION of CHOCOLATES in INDIA 46 11 Nestle India 50 12 Amul (GCMMF) 53 13 CAMPCO 59 14 Home-made Chocolates 62 15 Interesting Chocolate Facts 63 16 Problems & Challenges in Indian Chocolate Industry 64 17 External Factors affecting Growth of Chocolate Industry in INDIA 66 18 Growth Opportunities in Indian Chocolate Industry 67 19 Strategies for Growth & Success in India 69 20 Chocolate Boutiques & Designer Chocolates 70 21 Conclusion 72 22 Bibliography 73
Project Objective
This project aims at understanding the overall Chocolate Industry in India, the product portfolios of different players in the market, various factors affecting the growth and success of chocolate industry in India, the challenges and opportunities which the market offers and the changing trends in the Indian Chocolate Industry. The project also covers a brief study of Cadburys India with reference to above points.
keener as overseas chocolate giants Hershey's and Mars consolidate to grab a bite of the Indian chocolate pie. Per Capita Chocolate Consumption (in lb) of first 15 countries of the world Rank Countries Per Capita Consumption (in lb) 1 Switzerland 22.36 2 Austria 20.13 3 Ireland 19.47 4 Germany 18.04 5 Norway 17.93 6 Denmark 17.66 7 United Kingdom 17.49 8 Belgium 13.16 9 Australia 12.99 10 Sweden 12.90 11 United States 11.64 12 France 11.38 13 Netherlands 10.56 14 Finland 10.45 15 Italy 6.13 INDIA, stands nowhere even near to these countries when compared in terms of Per Capita Chocolate Consumption. The Indian chocolate industry is extremely fragmented with a range of products catering to a variety of consumers. We have the bars/slabs, jellies, lollipops, toffees and sugar candies. Given India's mammoth population, it comes as a surprise that per capita chocolate consumption in the country is dismally low - a mere 20 gms per Indian. Compare this to over 7 kgs in most developed nations. However, Indians swallowed 22,000 tonnes of chocolate last year and consumption is growing at 10-12 percent annually. The market size of chocolates was estimated to be around 16,000 tonnes, valued around Rs. 4.16 billion in 1998. Volume growth which was over 20% pa in the 3 years preceding 1998, slowed down thereafter. Both chocolate and sugar confectioneries have abysmally low penetration levels, in fact, even lower than biscuits, which reach 56 per cent of the households. Market growth in the chocolate segment has hovered between 10 to 20%. In the last five years, the category has grown by 1415% on an average and will expect it to continue growing at a similar rate in the next five years. The market presently has close to 60mn consumers and they are mainly located in the urban areas. Growth will mainly come through an increase in penetration as income levels improve. However, almost all of this consumption is in the cities, and rural India is nearly
chocolate-free. But the fact is that three quarters of Indians live in Rural Areas. Average summertime temperatures reach 43 degrees Celsius in India. Chocolate melts at body temperature of 36 degrees. Per capita consumption of chocolates in India is minuscule at 20gms in India as compared to around 5-8 kgs and 8-10 kgs respectively in most European countries. ... Awareness about chocolates is very high in urban areas at over 95%. ... Growth of other lifestyle foods such as malted beverages and milk food have actually declined by 3.7 per cent and 11.7 per cent, however the CHOCOLATES continue to grow at the rate of 12.6%. Low priced unit packs, increased distribution reach and new product launches can be said to have fuelled this growth. The launch of lower-priced, smaller bars of chocolate in the last two years and positioning of chocolate as a substitute to traditional sweets during festivals, have boosted consumption. This is also because chocolate, which was considered to be an elitist food, has caught the fancy of buyers looking for a lifestyle item at affordable cost. Till recently, chocolate consumption had been restricted by low purchasing power in the market. Chocolates and other cocoa-based snack foods were looked upon as food suitable only for the well-off. After economic liberalization in 1991, major changes have occurred in food habits, partly on account of rise in gross domestic product (GDP) growth and higher purchasing power in the hands of the middle-class representing a third of the total population. Availability of chocolate products has also exploded. A study had projected that sales of the Indian chocolate industry would rise from $125/$130 million in 1998 to $175/$180 million by the year 2000 and to $450 million by the year 2005 which ACTUALLY happened irrespective of various negative factors. Per capita chocolate consumption continues to be low at about 200g per person, being mainly consumed in urban areas. In the middle and higher income groups, 70 per cent of children, 43 per cent of young adults and 16 per cent of adults consume chocolate.
Chocolate Consumption Structure - 2004
Children 55% Adults 12% Young Adults 33%
Rs. 350 Cr. 14% Mints & Chew ing gums Rs. 325 Cr. 13% Sugar Boiled Confectionery Rs. 1600 Cr. 63%
AC Nielsen ORG Marg report estimates the Indian Chocolate Industry worth at Rs 2,000-crore (Rs 20 billion)
Types of Chocolates
Depending on what is added to (or removed from) the chocolate liquor, different flavors and varieties of chocolate are produced. Each has a different chemical make-up, the differences are not solely in the taste. 1. Unsweetened or Baking chocolate is simply cooled, hardened chocolate liquor. It is used primarily as an ingredient in recipes, or as a garnish. 2. Semi-sweet chocolate is also used primarily in recipes. It has extra cocoa butter and sugar added. Sweet cooking chocolate is basically the same, with more sugar for taste. 3. Milk chocolate is chocolate liquor with extra cocoa butter, sugar, milk and vanilla added. This is the most popular form for chocolate. It is primarily an eating chocolate. Cocoa is chocolate liquor with much of the cocoa butter removed, creating a fine powder. It can pick up moisture and odors from other products, so you should keep cocoa in a cool, dry place, tightly covered. There are several kinds of cocoa Low-fat cocoa has the most fat removed. It typically has less than ten percent cocoa butter remaining. Medium-fat cocoa has anywhere from ten to twenty-two percent cocoa butter in it. Drinking or Breakfast cocoa has over twenty-two percent left in it. This is the cocoa used in chocolate milk powders like Nestle's Quik. Dutch process cocoa is cocoa which has been specially processed to neutralize the natural acids in the chocolate. It is slightly darker and has a much different taste than regular cocoa. Decorator's chocolate or confectioner's chocolate isn't really chocolate at all, but a sort of chocolate flavored candy used for things such as covering strawberries. It was created to melt easily and harden quickly, but it isn't chocolate.
Categories of Chocolates
Commercial Chocolates are available in the following forms: 1. Bars or Moulded Chocolates 2. Counts 3. Panned Chocolates (Gems) 4. clairs 5. Assorted Chocolates Bars or moulded chocolates (like Dairy Milk, Truffle, Amul Milk Chocolate, Nestle Premium, and
Nestle Milky Bar) comprise the largest segment, accounting for 37% of the total chocolate market in volume terms. ... Wafer chocolates such as Kit-Kat and Perk also belong to this segment. Panned chocolates accounts for 10% of the total chocolate market. ... Wafer chocolates such as Kit-Kat and Perk also belong to this segment. ..
Form of Consumption
a. Pure Chocolates b. Toffees c. Cakes & Pastries d. Malted Beverages e. Wafer Biscuits & Baked Biscuits f. Chocolate Desserts
What is conching?
Raw unprocessed chocolate is gritty, grainy and really not suitable for eating. Swiss chocolate manufacturer Rudolph Lindt discovered a process of rolling and kneading chocolate that gives it the smoother and richer quality that eating chocolate is known for today. The name 'conching' comes from the shell-like shape of the rollers used. The longer chocolate is conched, the more luxurious it will feel on your tongue.
1. Cadburys India Limited 2. Nestle India 3. The Gujarat Co-operative Milk Marketing Federation (GCMMF) AMUL 4. Cocoa Manufactures and Processors Co-operative (CAMPCO) Bars Count Lines Wafer Panned Premium Cadburys Dairy Milk & Variants 5-Star, Milk Treat Perk Gems, Tiffins Temptation & Celebrations Nestle Milky Bar Bar One, Crunch Kit Kat, Munch Nutties Amul Milk Chocolate Fruit n Nut FUNDOO Bindaaz Almond Bar Campco Campco Bar, Cream Krust, Turbo Treat
parent holds over 90% of the equity capital after the first open offer. A second open offer has been made to buyback the balance shareholding, after which the company would operate as a 100% subsidiary of Cadbury Schweppes Plc Ever since the Cadbury is in India in 1947, Cadbury chocolates have ruled the hearts of Indians with their fabulous taste. The company today employs nearly 2000 people across India. Its one of the oldest and strongest players in the Indian confectionary industry with an estimated 68 per cent value share and 62 per cent volume share of the total chocolate market. It has exhibited continuously strong revenue growth of 34 per cent and net profit growth of 24 per cent throughout the 1990s. Cadbury is known for its exceptional capabilities in product innovation, distribution and marketing. With brands like Dairy Milk, Gems, 5 Star, Bournvita, Perk, Celebrations, Bytes, Chocki, Delite and Temptations, there is a Cadbury offering to suit all occasions and moods. Today, the company reaches millions of loyal customers through a distribution network of 5.5 lakhs outlets across the country and this number is increasing everyday.
Business
Cadbury dominates the Indian chocolate market with above 65 70 % market share. Besides, it has a
4% market share in the organized sugar confectionery market and a 15% market share in milk/ malted foods segment. Changing product mix Contribution to turnover 1994 Contribution to turnover 2001 Chocolate 59% 65% Sugar Confectionery 9% 10% Food Drinks 32% 24% Categories/ Brands Chocolate Bars , Count lines , Panned confectionery , Wafer chocolates, Assorted Chocolates & Gift Chocolates Sugar Confectionery Googly , Mocka, Gollum, Frutus & Nice Cream Food Drinks Bournvita, Delite & Drinking Chocolate Cadbury's Indian operations are not just the largest in Asia but also the cheapest. In India, Cadbury has the largest market share anywhere in the world and has been the fastest growing FMCG Company in the last three years with a compound annual growth rate of 12.5 per cent.
Plant locations
Cadburys manufacturing operations started in Mumbai in 1946, which was subsequently transferred to Thane. In 1964, Induri Farm at Talegaon, near Pune was set up with a view to promote modern methods as well as improve milk yield. In 1981-82, a new chocolate manufacturing unit was set up at the same location in Talegaon. The company, way back in 1964, pioneered cocoa farming in India to reduce dependence on imported cocoa beans. The parent company provided cocoa seeds and clonal materials free of cost for the first 8 years of operations. Cocoa farming is done in Karnataka, Kerala and Tamil Nadu. In 1977, the company also took steps to promote higher production of milk by setting up a subsidiary Induri Farms Ltd near Pune. In 1989, the company set up a new plant at Malanpur, MP, to derive benefits available to the backward area. In 1995, Cadbury expanded Malanpur plant in a major way. The Malanpur plant has modernized facilities for Gems, Eclairs, Perk etc. Cadbury also operates third party operations at Phalton, Warana and Nashik in Maharashtra.
Total Cost (in Rs.) Milk Powder / Liquid Milk / Cream 26232610 15.79 414212911.9 Dry Fruits 432340 162.6 70298484 Edible Oil 2167450 51.72 112100514 Glucose-Liquid 27061090 13.17 356394555.3 Cocoa Beans / Butter/ Powder 8478460 109.95 932206677 Malt Extract 8679690 20.39 176978879.1 Total 2062192021
Cadbury's India Limited Finished Products - Sales Revenue - 2004 (in Rs. Crores)
Cocoa powder (Tin/Bags) 2% Confectionery-
Hard Boiled 4% Excise duty 14% Chocolates/ Coated Wafer/ Confectionery 58% Malt Foods (Jar/Refill/Tin) 22%
Cadburys India Limited Sales in Rs. Million Years 1998 1999 2000 2001 Sales 3354 3892 4324 4716
Sales
3354 3892 4324 4716
Cadburys Temptation:
Cadburys Temptation is premium chocolate brand aimed for high value consumption. Various variants available are Almond, Rum, Cashew & Orange. Cadburys temptation is priced at Rs. 40
Cadburys Celebration
Cadbury India launched its premium Celebrations range, which contains traditional Indian dry fruits wrapped in Dairy Milk chocolate. This gifting option combines the pleasure of giving away dry fruits which Indians traditionally consider a premium, healthy gift with chocolate. Cadbury now has 90 per cent market share in this profitable segment.
5 STAR:
Consumer feedback suggested that the old 5 Star was too chewy, and people complained of it sticking to their teeth. It was made softer and melted easily in the mouth & introduced as 5 Star Crunchy
PERK:
Perk was made much lighter and the size of the bar increased to match Nestles Munch. Perk had been under fire from Nestles deadly duo of KitKat and Munch, but after the relaunch, its marketshare is two per cent more than KitKats. And, the five-year-old brand is now almost as big as the decades-old 5 Star in size, both in the region of Rs 50-55 crore.
HEROES:
Packaging innovation has played a vital role in revamping of various Cadburys brands.
Heroes brand is simply a multi-pack with miniatures of all its most popular brands in a single outer case.
Cadbury Desserts
for sweet moments after dinner
Khaane Ke baad Kuch Meetha Ho Jaye. Rs. 20/- per packet of 44 gms
Cadbury Dairy Milk (CDM) Desserts with rich indulgent crme center, in exotic & traditional flavors of Tiramisu and Kalakand. CDM Desserts offer the perfect rounding off taste, after meal that adds special Meetha' moments to the family. The rich tastes of CDM combined with the unique crme center in exotic flavors provide a special chocolate experience. CDM Desserts add delight to the after-meal moments, especially with the consumers whose current choice of sweets range from home made delicacies to fruits to meethai.
PRICING
After the roaring success of Nestles Munch and Chocostick, Cadburys empire struck back hard. The Rs 5 price point accounts for more than half of all chocolate sales. Nestle had seized the initiative at this price point, with its launch of Munch, now a roaring success (and the largest selling product at that price point). Today, Cadbury has four products at this price point: CDM, Perk, 5 star and Gems and the five-rupee CDM bar is its single largest-selling SKU. This is a potent price point in India, because the average purchasing power is abysmally low, is what industry analyst have to say. Nestle kicked off one of the biggest success the liquid chocolate category with its brand Chocostick priced at Rs.2 three months ahead of competition. Cadbury did react with Chocki, priced at Rs 2, expanding the concept of sachetisation to new frontiers. Chocki has been the single biggest growth driver for Cadbury as well as the entire chocolate category. The novelty of the
format endeared itself to the existing customer. In less than one year, it constituted nearly 10 per cent of the total chocolate market, split equally between Cadbury and Nestle.
Distribution
Chocolate needs to be distributed directly, unlike other FMCG products like soaps and detergents, which can be sold through a wholesale network. 90% of chocolate products are sold directly to retailers. Distribution, in the case of chocolates, is a major deterrent to new entrants as the product has to be kept cool in summer and also has to be adapted to suit local tropical conditions. Cadbury's distribution network used to encompasses 2100 distributors and 450,000 retailers. The company has a total consumer base of over 65 million. Besides use of IT to improve distribution logistics, Cadbury is also attempting to improve distribution quality. To address the issues of product stability, it has installed VISI coolers at several outlets. This helps in maintaining consumption in summer, when sales usually dip due to the fact that the heat affects product quality and thereby offtake. To avoid cannibalization of its higher priced products from lower priced ones, Cadbury is setting up two separate distribution channels one for CORE business & other for MASS markets, with different stockists, wholesalers and retailers. One set will be dedicated to Cadburys highend products and traditional chocolates. The other will cater to the mass market brands namely Chocki, Halls, Eclairs et al all products priced below Rs 3. But today, Cadbury's distribution network reaches out to six lakh outlets each for its chocolate & confectionery brands (i.e. total reaching12 lakh outlets).
Promotion
Typically it is said that chocolates are being eaten when everyone is happy. And this is something advertising has always portrayed. But it is found chocolates are eaten under diverse conditions and moods - when people are anxious, when they are sad, when happy - a whole range of emotions. Condensing these views & thoughts, it can be said chocolate is a true soul mate. Someone who is with you through the ups and downs of life, helping you bounce back. And that's what Cadbury's Dairy Milk (CDM) positioned itself as - a special friend.
RE-INVENTING CABDURY
Kya Swad Hai Zindagi Mein redefined the way Indians looked at Cadbury
Chocolates. (The commercial showed a beautiful young lady overcoming all obstacles on the cricket ground, crossing boundary, watchman, securities and embracing her lover who won the game by hitting a six). This theme introduced in around mid 90s bought instant growth to Cadburys Dairy Milk. The Ad campaign ran successful for about four years and immersed deeper inside hearts of Indians. In March 2002, Cadbury launched its next advertisement campaign for its flagship chocolate brand, Cadbury's Dairy Milk (CDM). The campaign featured a television (TV) commercial that was significantly different from the company's earlier commercials for the brand. It featured Cyrus Broacha interviewing college students and asking why they liked to eat CDM. This was followed by college students 'singing' their excuses for eating CDM. Just as the commercial seems all set to end with the students and Cyrus singing the famous CDM theme, 'Khane Walon Ko Khane Ka Bahaana Chaahiye' (those who want to eat, will find excuses), a student comes up and questions Cyrus, The advertisement aimed at conveying the idea that no specific occasion is required for consuming CDM. This was a significant departure from CIL's strategy of appealing to adults in India, who sought a rational justification for indulging in chocolate consumption. Cadbury roped in Preity Zinta for its PERK brand. Preity Zintas angelic dimples laid the foundation for what would become the Indian teenagers favorite snack. After this campaign, PERKS sale surged Cadburys advertising has, over the past few years, aptly reflected Indias passion for chocolates.
CADBURY ADVERTISEMENTS
Dil ko jab kushi choo jaye..."...kuch meetha jo jaye.." Akhir barvi pass ho hi gaya." kuch meetha jo jaye.. Log Cadbury Kyon Khate Hai.Khaane waalon ko khaane ka bahaana." Cadburys Dairy Milk..Asli swad zindagi ka CADBURY DESERTS
khaane ke baad kuch meetha ho jaaye.
CADBURY CELEBRATIONS
Looking wistfully at a photograph, Mr. Bachchan thinks, he recollects the photo-shoot when he had thrown the cap off his friend's head. Aaj dil ne socha yun, kissi apne ko kya doon? Jo usse kahe tum apne ho, .jo apne aap mein khaas ho, jo sirf taufa nahin ehsaas ho Jisme rishto ki mithas ho. Cadburys Celebrations
Rishto ki Mithas
CABDBURYS FIGHT-BACK
'Project Vishwas'
Steps to ensure quality & regain the confidence
Following the controversy over infestation in its chocolates, Cadbury India Ltd unveiled 'Project Vishwas', a plan involving distribution and retail channels to ensure the quality of its products. The company's team of quality control managers, along with around 300 sales staff, checked over 50,000 retail outlets in Maharashtra and replaced all questionable stocks with immediate effect. The Vishwas programme was intended to build awareness among retailers on storage requirements for chocolates, provide assistance in improving storage conditions and strengthen packaging of the company's range of products. Cadbury reduced the number of chocolates in its bulk packets to 22 bars from the present 60 bars. These helped stockists display and sell the products "safely and hygienically" 190,000 retailers in key states were covered under this awareness programme.
"Aur mujhe apni international technology....apne kade quality controls aur double protection... ...packaging dikhayi." Saying which he takes a bite of the chocolate. Finally giving his personal assurance and approval he says, "Aaj kal mein badi chain ki neend so raha hoon." "Ab aapki favourite Cadbury Dairy Milk naye purity seal pack mein."
the product. Competition from MNCs like Nestle as well as imported brands. Increasing competition puts pressure on advertisement budget and margins. However on the positive side, it helps in expanding the market.
I BUYING BEHAVIOUR
Chocolates are consumed as indulgence and not as snack food, as prevalent in western countries. Almost 75% chocolates are impulse purchases. Chocolates are bought predominantly by adults and gifted to children. On an average the wholesalers sells Rs50000/month of Chocolates (all brands included). Also the wholesaler usually deals in all kinds of FMCG goods, Foodstuff in addition to the chocolates. The items like chocolates are placed near the counter. Chocolates are kept in cardboard boxes and are also delivered in the same. ... In a few of the cases the chocolates were kept separately (as per equipment provided by the manufacturer e.g. VISI Coolers), In addition to marketing promotions companies have been focusing extensively on the promotions by the sales staff. Also the companies can devise there marketing strategies that are catering to specific segments and are thus more effective.
III
STOCKING OF THE PRODUCTS
In most of the cases, various brands of chocolates are kept together. In some of the cases the chocolates are stocked depending on the manufacturers provision. The chocolates are kept in Glass Jars and boxes These are provided by the respective companies along with the product. The chocolates are kept there. But in most of the cases chocolates are stocked near the counter. Ideally the shopkeeper tries to keep chocolates within the reachable (sitting on the counter) distance. Chocolates are kept at or below the eye level. This is to facilitate visibility of the chocolates for the customer who is visiting the store. Medium size retailers sell chocolates of about Rs. 400 Rs. 800 per week while big retailers sell chocolate worth Rs1000 or more per week.
television. Nestle India Limited grabs the 2nd position with 34% share, whereas, Parle Products gets the 3rd position with 8% of the advertising share.
NESTLE INDIA
Background
Nestle India was promoted by Nestle Alimentana, Switzerland, a wholly owned subsidiary of Nestle Holdings Ltd., Nassau, Bahama Islands. Nestle is one of the oldest food MNC operating in India, with a presence of over a century Nestle has a presence in 83 countries worldwide. It has a total number of 509 factories out of which 220 are located in Europe, 153 in America and 136 in Africa, Asia and Oceania The Swiss food giant has been in India for 90 years, with six manufacturing plants, 3,500 employees and almost $500 million in sales in 2002.
Business
Nestle has a presence in the following categories - Baby Food, Milk products, Beverages (Coffee, malted beverage), Chocolates & confectionery and other processed food products.
grabbing the Rs 5 price point. From Jan Sep 05, Nestle chocolates witnessed a growth of 14.8 per cent.
Amul (GCMMF)
The Rs 2,748-crore GCMMF is in chocolate segment since quite some time. However, its market share is just 5% and the company did not look aggressive till recently. Amul chocolates used to come in not so attractive packages and very little marketing effort was seen. But things have changed and for good. Amul is now an important player in this growing chocolate industry. It has firmed up its measures with marketing and new product launches and revamping its packaging. Amul just recently launched new chocolate brands in the market - Rejoice, Kite Bite and Nuts `bout You.
While the first two were been priced at Rs 10 for a 30 gm stick, Almond Bar carried a price tag of Rs 10 for a 35 gm chocolate.
Cadbury products:
Cadbury was incorporated in India on 19 July 1948. Currently, Cadbury India operates in four categories: chocolate confectionery, milk food drinks, beverage and candy & gum category. Its products include Cadbury Dairy Milk, Bourneville, 5-Star, Perk, Gems, clairs, Bourn vita, Celebrations, Bourneville, Cadbury Dairy Milk Shots, Cadbury Dairy Milk Silk, Babbalu, Tang and Oreo.
Cadbury is the market leader in Chocolate Confectionery business with a market share of over 70%. The Brand Trust Report, India Study, 2011 published by Trust Research Advisory ranked
Cadbury in the top 100 most trusted brands list. Cadbury India would launch Swiss chocolate brand Toblerone in Indian markets.
CAMPCO
Central Arecanut and Cocoa Manufactures and Processors Co-operative
A sudden withdrawal by the buyers of cocoa from the procurement operations
due to crash in the international market came as a shock to cocoa cultivators in India. Karnataka and Kerala Governments enthused, at this stage, the CAMPCO to enter on the scene to rescue the farmers from distress. CAMPCO willingly took up the responsibility to enter the cocoa market and performed a savior's role. As a strategy for survival in the International scene the CAMPCO played a major role in establishing a name for Indian Cocoa, which hitherto had not been achieved. It procured cocoa pods from growers and adopting scientific processing methods to market standards, released dry cocoa beans matching in quality in the world market equal to that of Ghana, Brazil and other cocoa cultivation nations. After entering into the Cocoa market, the Co-operative was able to export Cocoa Beans worth Rs 40 million to European countries in the initial phase of operations. India was not known as a Cocoa producer in the international Trading Community, since yearly production was hardly 5 to 6 thousand tonnes which is not even 0.3% of the total world consumption. Through sustained efforts CAMPCO has been able to ensure reasonable prices to Cocoa growers. The Co-operative had to face the problem of a limited internal market and unremunerative export market. With the setting up of the chocolate manufacturing factory at Puttur, 50KM from Mangalore, the Co-operative has been able to increase local consumption of cocoa based products and to export value added semi-finished products. With a view to creating a permanent demand and a steady market for the beans, CAMPCO established a Chocolate Manufacturing Factory at Kemminje village in Puttur Taluk in Dakshina Kannada district, adopting foreign technical advancement in chocolate making. The Factory was set up in 1986 at an initial investment of Rs.116.7 Millions.
Home-made Chocolates
Another area of chocolate industry in India is HOME-MADE CHOCOLATES. This segment is highly fragmented and operates independently. They are more pronounced for manufacturing distinct flavors and varieties of chocolates in various shapes and size. But, these chocolates are usually
priced at a higher price than that available for branded products for the same quantity. Housewives from elite class usually indulge in this kind of business. They usually operate in local area and through their contact network. Some home-made chocolate manufacturers manufacture really attractive GIFT CHOCOLATES.
Cadbury loses 1.5 percent of annual sales of Rs. 6.8 billion to heat damage. Companies revise ingredients to make chocolate withstand heat, and so Indian chocolates are more resilient to heat than Eurupean chocolates by a factor of 2 degrees. Ironically, the chocolate market has grown recently because smaller retailers have stuffed fridges and coolers supplied by the cola companies Coke and Pepsi with chocolates. Nestle and Cadbury have tried to provide loans for retailers to buy fridges, but to hold down power costs the shopkeepers switch off the fridges at night. As a result the cocoa fat melts and migrates to the main body of the chocolate bar. When the cooling is switched on in the morning, the cocoa fat solidifies and turns white, presenting a bizarre, un-sellable white on black form. Nestle tried to provide fridges with see-through doors, but was appalled to see its chocolates sandwiched between dead chicken, butter and vegetables. Small coolers were provided to retailers to keep the chocolate from melting, but that didn't quite do the trick. Electricity costs money and is not provided in a uniform way, so on and off the electricity goes and the product may suffer sometimes 3. RAW MATERIALS: Cocoa is the key raw material and accounts for around 35% of the total material cost (including packaging) of chocolates. The price of cocoa has been hitting a new high of late. Cocoa prices are at a near 20-year high at $2358 per ton, up from $900 a year back. India does not produce cocoa to any noteworthy extent but is a large consumer of chocolates. Consumption of chocolates and other cocoa-based products, especially among the middle class, has been growing. 4. TRANSPORTATION: Chocolate needs to be distributed directly, unlike other FMCG products. 90% of our products are sold directly to retailers. Building such a direct network in rural areas is a daunting task since the infrastructure is poor in India in rural areas. 5. THREAT FROM IMPORTED BRANDS: Free availability of imported brands bought through illegal routes pose a threat to the domestic chocolate industry. Usually, these imported chocolates taste better than domestic chocolate due to recipe difference. Hence consumers who are willing to spend a little more, prefer these imported chocolates. However, the premium brands, which come through official channels, do not pose a threat to the market, as these cater to a small niche market. However there is a lot of dumping from neighboring countries like Dubai, Nepal, etc of inferior brand of imported chocolates. These are not only of low quality, but are brought very near to their expiry dates. Most of the cheap chocolate brands that are available do not meet Indian Food Regulations.
Good monsoon ensures adequate availability of raw materials, which are mainly agricultural in nature. Raw material prices have significant influence on margins. Government policies in terms of licensing, duties, movement of agricultural commodities etc. also affect the introduction of products, time lag for a product launches, taxes, excise, etc all influence the business. Market growth driven by overall economic growth and urbanization also contributes. An overall booming economy will consume tonnes of chocolates because consumer spending increases. Also, the absolute number of consumers in middle class & upper middle class increases. Rupee depreciation improves export realizations, however it also makes import of raw material (esp. cocoa) expensive.
consumption till recently. But with the launch of lower-priced, smaller bars of chocolate in the last two years and positioning of chocolate as a substitute to traditional sweets during festivals, have boosted consumption. Chocolates which were considered to be an elitist food hit the fancy of masses looking for a change in life style at affordable cost.
Rural expansion:
Rural market and small town markets are seen as the key to spurring double-digit growth. Products such as liquid chocolate packs from the existing portfolio are expected to enable rapid acceptance. Leverage India for offshoring: India is being leveraged for export of finished goods, as a superior destination for manufacturing best practices, and for BPO opportunities. All the above points bring us to a conclusion that theres an immense scope for growth of chocolate industry in India not only in its offering pattern but also for increment in its total consumption value and size.
chocolates, some unique flavors like tamarind and chilli chocolates, and champagne and Jamaican rum truffles are also demanded in the market. These manufacturers also cater to the older and the health-conscious choco-lovers, the high fibre, low fat and sugar ones are quite popular. Apart from the festive season, weddings and baby announcements also see heavy offtake of premium sweet delicacies. For those who are health conscious there is also a special range of sugar-free and diet chocolates. These are usually bought by corporates or individuals who want to make a special statement. Extensive range of Baby chocolates are available which are beautifully wrapped in pinks and blues and embellished with decorations like baby bottles, satin ribbons, silk flowers, bibs and bows are also available and are getting very popular in elite classes. Designer chocolates are tailored for customers who're looking at gifting chocolates with a personalized touch. Embossing of names, logos of companies and personalized message on the chocolates are fast becoming popular. There are 1,000 varieties of designs to choose from -- ranging from good luck charms, X'mas figurines and animals -- and nearly 50 kinds of gift packaging available to suit any particular occasion. From festive occasions to personal celebrations to corporate gifting, made-to-order chocolates are most sought after. And we are not talking about the boring old rectangular slabs of cocoa These designer chocolates focus a lot of attention on packaging. The packaging of these products includes materials like imported mesh, gold foils and brocade, lace and satin-draped boxes being in heavy demand. With the rise in disposable incomes, people do not mind spending on designer chocolates, most of which costs between Rs 500 and Rs 2,500 per kg. Few chocolate makers cater only to corporate clients for festive occasions, product launches, new employee joinings and management training programmes. From logos to company names being embossed in chocolates of different shapes and colours, these are all in demand.
CONCLUSION
The Indian Chocolate Industry is a unique mix with extreme consumption patterns, attitudes, beliefs, income level and spending. At one hand, we have designer chocolates that are consumed when priced at even Rs 2500/kg while there are places in India where people have never even tasted chocolates once. Understanding the consumer demands and maintaining the quality will be essential. Companies will have to keep themselves abreast with the developments in other parts of the world. PRICING is the key for companies to make their product reach consumers pockets. Right pricing will make or break the product SUCCESS. Economical distribution of the products will also be equally important. The companies strategies should focus on driving sales through a right product mix,
efficient materials procurement, reduced wastages, increased factory efficiencies and improved supply chain management. Theres an immense scope for growth of chocolate industry in India - geographically as well as in the product offering.
The Indian Chocolate Industry is destined to grow and will do so in the future.
Bibliography
www.rediff.com www.indiainfoline.com www.business-standard.com www.India-stats.com www.Agencyfaqs.com www.Equitymaster.com www.indiantelevision.com www.myiris.com www.ibef.org www.thehindubusinessline.com