Ferrero-is-optimistic-inspite-of-low-share-of-its-flagship-brand-in-the-chocolate-market-of-India.


"While Ferrero manufactures some of its popular brands such as Kinder Joy and Tic Tac, its flagship, Ferrero Rocher, continues to get imported despite steep import duties. With brands like Nutella and Tic Tac, the company is seeing a good growth in its premium space."

After acquiring Nestle’s US confectionery business recently in January'2018, Ferrero is not ruling out inorganic opportunities in India as well. Despite its presence since 2008, Ferrero India is yet to capture a significant share compared to other international players like Mondelez which is dominating in the country. Ferrero's latest acquisition has effectively made it the third biggest organization in the worldwide chocolate/confectionary market, however its impact in India is expected to be negligible since the most of Nestle's confectionery portfolio is absent in India.

The company manufactures some of its popular brands like Kinder Joy and Tic Tac. It's flagship brand, Ferrero Rocher continue to get imported despite steep import duties. The brand is imported and re-packaged in India. Moreover, the company is not looking for any local production in near future. For the production of Kinder Joy, India has emerged as one of the second largest manufacturing hub, which is located in Pune. One of its premium brands Nutella dominates the chocolate spread category in the country.

According to recently published report of Bonafide Research, "India Chocolate Market Outlook 2022", the chocolate market of India is expected to grow with a CAGR of more than 15% over the period of 2017-2022. Premium chocolate makes a smaller percentage of overall chocolate consumption in India. However, the category is growing significantly from the last five years as consumers are trading up to luxury chocolates. This has given an opportunity to international brands to enter the Indian market and increase their penetration by creating an affordable premium space for the aspirers. Even established chocolate manufactures in India are extending their portfolios to include more and more high-end chocolate products. The premium play suggests better margins for existing players, especially in time of persistent inflation and stressed margins. Presently, the premium chocolate category is dominated by Ferrero and Mondelez, both international brands. Ferrero, who entered in 2004, created a market for premium chocolates in India from scratch. Ferrero was the first marketer to sense that there was a set of consumers in India willing to pay Rs. 300 for a box of chocolates. They learnt that there is a space for premium products even in a country dominated by price conscious consumers.

In the year 2016, Ferrero has announced that it would be investing Rs. 367 crore in the Indian market, while Mondelez International was also planning to invest Rs. 100 crore in a research, quality and development hub in Maharashtra. Increasing amount of investments from these established players is one of the major reasons for chocolate business growth in the country. On the other hand, Nestle India has also announced that it will be bringing more premium brands to India as well as re-launching its Alpino chocolates. Hence, there is a lot of buzz in the premium category and every marketer wants to cash-in on the opportunity. Indian consumers buy premium chocolates mostly during festivals when they generally gift sweets like 'mitthai'. Festivals are an occasion when sales of premium chocolates are seeing a spurt, mainly because of innovation and variety by manufacturers in gifting segment. Diwali, Raksha Bandhan, Christmas and New Year are the prominent festivals when sales of premium offerings pick up. Seasonal offerings for specific occasions like Valentine’s Day are also lapped up easily by consumers and such assortments have done really well for marketers.

Major Companies

Major international companies operating in the chocolate market of India are Mondelez India Foods Pvt. Ltd., Nestle India Limited, Ferrero India Pvt. Ltd., Mars International India Pvt. Ltd. A and Hershey India Pvt. Ltd. Major domestic companies operating in the chocolate market of India are Gujarat Cooperative Milk Marketing Federation Ltd., Lotus Chocolate Company Ltd., The CAMPCO Ltd., Parle Products Pvt. Ltd. and ITC Limited.

Ferrero-is-optimistic-inspite-of-low-share-of-its-flagship-brand-in-the-chocolate-market-of-India.

"While Ferrero manufactures some of its popular brands such as Kinder Joy and Tic Tac, its flagship, Ferrero Rocher, continues to get imported despite steep import duties. With brands like Nutella and Tic Tac, the company is seeing a good growth in its premium space." After acquiring Nestle’s US confectionery business recently in January'2018, Ferrero is not ruling out inorganic opportunities in India as well. Despite its presence since 2008, Ferrero India is yet to capture a significant share compared to other international players like Mondelez which is dominating in the country. Ferrero's latest acquisition has effectively made it the third biggest organization in the worldwide chocolate/confectionary market, however its impact in India is expected to be negligible since the most of Nestle's confectionery portfolio is absent in India. The company manufactures some of its popular brands like Kinder Joy and Tic Tac. It's flagship brand, Ferrero Rocher continue to get imported despite steep import duties. The brand is imported and re-packaged in India. Moreover, the company is not looking for any local production in near future. For the production of Kinder Joy, India has emerged as one of the second largest manufacturing hub, which is located in Pune. One of its premium brands Nutella dominates the chocolate spread category in the country. According to recently published report of Bonafide Research, "India Chocolate Market Outlook 2022", the chocolate market of India is expected to grow with a CAGR of more than 15% over the period of 2017-2022. Premium chocolate makes a smaller percentage of overall chocolate consumption in India. However, the category is growing significantly from the last five years as consumers are trading up to luxury chocolates. This has given an opportunity to international brands to enter the Indian market and increase their penetration by creating an affordable premium space for the aspirers. Even established chocolate manufactures in India are extending their portfolios to include more and more high-end chocolate products. The premium play suggests better margins for existing players, especially in time of persistent inflation and stressed margins. Presently, the premium chocolate category is dominated by Ferrero and Mondelez, both international brands. Ferrero, who entered in 2004, created a market for premium chocolates in India from scratch. Ferrero was the first marketer to sense that there was a set of consumers in India willing to pay Rs. 300 for a box of chocolates. They learnt that there is a space for premium products even in a country dominated by price conscious consumers. In the year 2016, Ferrero has announced that it would be investing Rs. 367 crore in the Indian market, while Mondelez International was also planning to invest Rs. 100 crore in a research, quality and development hub in Maharashtra. Increasing amount of investments from these established players is one of the major reasons for chocolate business growth in the country. On the other hand, Nestle India has also announced that it will be bringing more premium brands to India as well as re-launching its Alpino chocolates. Hence, there is a lot of buzz in the premium category and every marketer wants to cash-in on the opportunity. Indian consumers buy premium chocolates mostly during festivals when they generally gift sweets like 'mitthai'. Festivals are an occasion when sales of premium chocolates are seeing a spurt, mainly because of innovation and variety by manufacturers in gifting segment. Diwali, Raksha Bandhan, Christmas and New Year are the prominent festivals when sales of premium offerings pick up. Seasonal offerings for specific occasions like Valentine’s Day are also lapped up easily by consumers and such assortments have done really well for marketers. Major Companies Major international companies operating in the chocolate market of India are Mondelez India Foods Pvt. Ltd., Nestle India Limited, Ferrero India Pvt. Ltd., Mars International India Pvt. Ltd. A and Hershey India Pvt. Ltd. Major domestic companies operating in the chocolate market of India are Gujarat Cooperative Milk Marketing Federation Ltd., Lotus Chocolate Company Ltd., The CAMPCO Ltd., Parle Products Pvt. Ltd. and ITC Limited.



Related Blogs


Subscribe