Indian Confectionery Sector is Poised for Double Digit Growth to 2017
28 October 2013
All categories are set for growth, but Chocolate is expected to grow at the fastest rate, according to a new report by Canadean.
The Indian Confectionery sector is forecast to record positive growth between 2012 and 2017, with strong double digit Compound Annual Growth Rates (CAGR) for both value and volume; 18.2% and 14.5% respectively. The category is the expected to be the third best growing of the 15 Food sectors monitored by Canadean in the country, but will remain in its position as the fourth largest market. 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. Chocolate is 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. 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 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.
This information is based on findings from Canadean’s report: ‘The Future of the Confectionery Market in India to 2017’.