India poised for double-digit growth in confections
UK market research group projects growth for all categories, with chocolate leading the way
In its The Future of the Confectionery Market in India to 2017 report, Canadean, a UK-based market research group, predicts the Indian confectionery sector will post strong double-digit compound annual growth rates (CAGR) for both value and volume — 18.2% and 14.5% respectively — between 2012-2017.
The category is the expected to be the third fastest growing segment of the 15 food sectors monitored by Canadean in the country, but will remain as the fourth largest market sector.
A growth in disposable income, strong marketing campaigns, and the increase of Western influences all support growth for the confectionery sector, and the domestic confectionery industry has emerged as one of the largest and most well-developed food processing sectors in the country.
In value terms, chocolate was the largest category in the Indian confectionery market in 2012, with a 40.1% share. However, in terms of volume, it was the smallest category recording 20.6% of share, the report says.
Chocolate continues to be of growing interest to the Indian consumer. In the period leading up to 2017, both value and volume are expected to be above the sector average, at 21.6% and 19.3%, respectively. Sugar confectionery accounted for the largest volume in the sector in 2012, with a 53.6% share, the company reports.
“This more traditional category recorded a considerably lower value share at 36.6%. In terms of growth, the market value is forecast to see a CAGR of 17.2%, suggesting that manufacturers in this sector may take the opportunity to raise prices and launch more premium products. A projected volume CAGR of 14.9% indicates that they will succeed in this, faced with the growing demand for chocolate from the growing middle classes,” the authors assert.
The smallest category, gum, recorded approximately a quarter of the market for both value and volume in 2012. However, Canadean’s data projects that growth will be weak, in comparison to the other categories in the Indian confectionery sector. Whilst double digit CAGR increases are expected for both value and volume over the forecast period, at 13.3% and 9.1% respectively, growth is well below the sector average.