While the global chocolate confectionery market posts slow growth, new research from global market intelligence agency Mintel reveals that India is defying the odds. Indeed, India is now one of the world’s fastest growing chocolate confectionery markets.
Sales of chocolate confectionery in retail markets grew by 13 percent between 2015 and 2016 in India, followed by Poland which saw sales growth of 2 percent. In comparison to the rest of the world, Poland and India were the only two markets to see sales of chocolate grow in 2016, with sales in the United States (US), United Kingdom (UK), Germany and France flat over this period, while sales fell in Russia (-2%), Brazil (-6%), and China (-6%).
Data from Mintel also reveals India’s chocolate confectionery market has had a strong Compound Annual Growth Rate (CAGR) of 19.9 percent, in retail market value, between 2011 and 2015, and is expected to grow at a CAGR of 20.6 percent from 2016 to 2020.
When it comes to chocolate confectionery consumption (volume sales), it seems India is a nation of chocolate lovers, as Mintel research reveals that India consumed 228 thousand tonnes worth of chocolate in 2016. Other markets that have consumed in excess of 200,000 tonnes of chocolate last year include France (251 thousand tonnes), Brazil (236 thousand tonnes), and China (202 thousand tonnes). Meanwhile, Australia and Indonesia consumed 95 thousand tonnes and 94 thousand tonnes worth of chocolate in 2016 respectively. The US and the UK, on the other hand, consumed 1.3 million tonnes and 555 thousand tonnes of chocolate respectively.
Marcia Mogelonsky, Director of Insight, Mintel Food and Drink, said: “Chocolate confectionery had an uneven year in 2016. Volume sales in developed markets remained flat, while the picture was a bit brighter in emerging markets, like India, where sales generally fared better. Our research indicates that consumers in India believe chocolate to be beneficial and convenient – seemingly the key reasons behind the growth of the country’s chocolate confectionery market both in value and volume.”
Indeed, according to a consumer study by Mintel, 42 percent of Indian consumers have eaten sweet or sugary snacks (other than biscuits) such as chocolates and cakes in the past three months (April-June 2016), rising to 53 percent of consumers aged 18-24. On the benefits of chocolates, Mintel research reveals over two in five Indian consumers (44%) find sweet or sugary snacks such as chocolates and cakes to be healthy, while over one in three (35%) Indians believe these snacks provide them with energy.
Meanwhile, as many as one in two (49%) Indian consumers associate sweet or sugary snacks such as chocolates with convenience. Data from Mintel also reveals 43 percent of Indians consume sweet or sugary snacks such as chocolate and cake between lunch and dinner, with over half (53%) of Indian consumers reporting that they tend to snack in between meals because they get hungry.
Overall, global launch activity in the confectionery category was somewhat restrained in 2016. The number of chocolate confectionery launches globally grew by just 3 percent between 2015 and 2016, with seasonal chocolate launches accounting for one quarter (25%) of global chocolate new product launches. This was the biggest area of chocolate New Product Development (NPD) in 2016, according to Mintel Global New Products Database (GNPD).
“Our research shows that seasonal chocolate tops all chocolate new product development, a testament to the popularity of seasonal treats among consumers across the globe. This reflects the fact that these products are typically bought to help celebrate holidays or special occasions. With this in mind, seasonal chocolate is somewhat immune to recessionary pressures as these products are bought on an occasional basis.”
Proving chocolate lovers have a heart, interest in ethical products remains relatively strong, with 17 percent of new products claiming some sort of ‘ethical-human’ positioning, which could include fair trade, Rainforest Alliance, or some other independent ‘bean-to-bar’ certification. Although still a small part of the category, accounting for less than 6 percent of global new product introductions in 2016, launches of chocolate confectionery with an organic claim increased 6 percent between 2014 and 2016.
Finally, Mintel research shows that consumer demand is likely to be the major impetus for more conversion to organic offerings. In India, as many as 19 percent of Indian consumers would like to see a wider variety of natural snacks that have no additives or preservatives, for instance.
“Providing organic cocoa is proving to be a challenge for the industry. In order to satisfy the growing demand, it will become necessary for more cocoa growers to switch to organic farming methods. As interest in healthy sweets continues to rise, the availability of chocolate that offers organic or all natural positioning will be desirable as consumers look for better-for-you options,” Marcia concludes.