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Chocolates gain in festive gift demand as dry fruit prices soar 25-30%
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Tuesday, 22 October, 2013, 08 : 00 AM [IST]
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Our Bureau, Mumbai
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fiogf49gjkf0d Demand for chocolates as a gift item has increased by almost 40 per cent with the advent of the festive season already and is likely to rise further as dry fruit prices have increased substantially by about 25-30 per cent, apex industry body ASSOCHAM said recently.
“Adulteration in traditional sweets eroding consumers’ confidence along with dry fruit prices going through the roof and other significant multiple factors like growing acceptance of chocolates amid varied Indian palates, attractive packaging, consistency in quality, growing gifting culture, rising urban affluence amid youth with high disposable incomes and a crazy sweet tooth together with other related factors are driving the demand for chocolates,” according to a survey conducted by ASSOCHAM (The Associated Chambers of Commerce and Industry of India) to ascertain the gifting trends this festive season.
ASSOCHAM under the aegis of its social development foundation interacted with about 1,000 consumers, traditional sweet shopkeepers, kirana stores, wholesale dry fruit traders and shopkeepers during the course of past fortnight in 10 cities of Ahmedabad, Bangalore, Chandigarh, Chennai, Delhi-NCR, Hyderabad, Jaipur, Kolkata, Lucknow and Mumbai.
Most of the consumers said that dry fruits would be the last thing on their minds as a gifting option this festive season as its prices have already sky-rocketed and will rise further as Diwali draws closer.
Besides, majority of these also said they preferred chocolates over sweets as a gift option considering the factors like longevity, health-related benefits, attractive packaging and so on.
Almost all the retail stores selling chocolate gift hampers said they were being sold like hot cakes and considering the massive rise in demand for the same they booked orders in advance as Diwali drew closer.
Another significant factor that is fuelling chocolate demand during festive season in India is that it can be easily ordered online and its timely delivery at the desired destination highlighted the survey.
Most of the dry fruit traders and shopkeepers said that recent rupee depreciation against major currencies had lead to an escalation of about 10-15 per cent in wholesale markets and the retail shoppers would have to cough up about 20-25 per cent more money.
Almost all the sweet shop owners conceded that demand and preference for sweets as a gifting option during the festive season has plummeted significantly between 35-40 per cent more so due to fear of adulteration though most of them also attributed it to negative publicity propaganda being channelised by the chocolate industry, as per the survey.
“Chocolate confectionery makers have also increased prices and reduced pack sizes owing to sky-rocketing input costs as prices for major ingredients like cocoa, milk and sugar have soared in both domestic/global markets and this will only lead to consumers tightening their purse strings further,” said Rawat.
Growing at a Compounded Annual Growth Rate (CAGR) of about 25 per cent, India’s chocolate industry size is currently worth about Rs 5,000 crore and is likely to cross Rs 7,500 crore mark in the next couple of years while globally the chocolate industry is worth over $85 billion. Besides, India’s per-capita chocolate consumption is hovering at about 100 gram and urban centres comprise 35 per cent of the chocolate consumption in the country. Cadbury is leading the pack with about 70 per cent market share followed by Nestle, Amul, Ferrero Rocher, Toblerone and others.
“Though lower penetration levels provide large scope for expansion of chocolate industry across India but there is a lack of interest amid regional confectionary players to enter the chocolate market as firstly, it requires huge capital investment for production and brand promotion and secondly, facing established global players ruling the market is another tough task,” said Rawat.
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