The Indian confectionery market witnessed the launch of over 200 products in various categories last year, thus ranked, according to Datamonitor, in the top 20 in terms of global new product launches in 2009.
Confectionery makers are expanding their product ranges in India, based on recognition of the country’s huge growth potential for chocolate products and sweets and relative insulation from the global recession, according to a Datamonitor review of the market.
“Sugar confectionery had the highest number of product launches during the year, followed by chocolate which saw a significant increase in sales in the recent years,” note the analysts.
Indeed, this week saw Bosch unveiling plans to build a new €4m packaging machinery plant in the country to meet burgeoning demand growth from India’s food, beverage and pharmaceutical sectors.
Ashok Gourish, business head at Bosch Packaging India, told our sister site FoodProductionDaily.com the investment would realise a major increase in its production capacity, saying that sustained and strong growth from the food industry, particularly in confectionery, was fuelling climbing demand for the company’s machinery.
With the increasing discretionary incomes of consumers in urban India, spending on chocolates, which has long been considered a luxury good, has increased significantly over 2005/09, said the confectionery market specialists.
“For a long time now, Indians have followed the tradition of exchanging sweets during festivals and occasions. In the recent years, chocolates have been replacing sweets on such special occasions in India,” reports Datamonitor.
Cadbury, now Kraft owned, commands almost a 70 per cent share of the fast growing Indian chocolate confectionery market and together with number two Nestlé, their overall value share of that sector exceeded 90 per cent in 2007.
And Indian joint venture Godrej Hershey is reported to be introducing chocolate products amdist strong competition from those dominant players.
Up until now the alliance, established in 2007, was focused on supplying food and sugar confectionery products only in India – the Indian company holds 49 per cent stake in the venture and 51 per cent is held by US based Hershey’s.
"The company (Godrej Hershey) is planning to get into the chocolate business, which is the main business Hershey's has all over the world," Godrej Industries Ltd chairman Adi Godrej said back in June
Another marking trend observed in the Indian confectionery market during 2009 was the emerging adult confectionery market, which is still in a nascent stage.
“Considering that adults have higher discretionary income to spend on confectionery, manufacturers consider this to be a market which is less sensitive to price changes than the children’s confectionery segment,” comments Saritha Pingali, Datamonitor consumer markets analyst.
Datamonitor notes that ‘kids’ as a claim on new products declined in 2009.
Manufacturers, continued the market research firm, are cautious of the increasing health consciousness among Indian adults and have launched few products specifically targeted at the health conscious adult consumer segment.
The Indian confectionery market seems to be trending towards health, with most of the claims on the new products launched in 2009 reflecting health and nutrition.
‘Vegetarian’ was the top claim among all the new confectionery products launched in the country in 2009, while claims such as 'no sugar', 'no gluten', 'high in fiber' and 'high in vitamins' have witnessed healthy growth over 2008, notes the report.
In 2009, majority of the top ten flavours of all the new confectionery products launched were fruit-based. Some of the top flavours that saw a significant increase over 2008–09 were: orange, raspberry and caramel however, despite the fact that Indians have started embracing foreign brands, the preference for local flavours remained unaltered.
“The trend of targeting the urban Indian consumer is expected to continue along with a focus on rural India, where the country is expected to see a growth in discretionary incomes and consumer spending,” concludes Saritha.