Chocolate to be the fastest growing confectionery segment in India, China. The chocolate consumption is believed to create a record by reaching the highest percentage growth from the emerging middle income markets such as India. The increase in the chocolate consumption points out at the strong positive correlation between GDP per capita and confectionery. Chocolate to be the fastest growing confectionery segment in India, China
India and China are the two markets with the lowest per capita consumption levels across the world. Analysts claim that they provide the greatest long term growth potential.
India is expected to deliver a CAGR (compounded annual growth rate) of 9 percent in the confectionery market in the time period from 2014 to 2019, as per Euromonitor. The chocolate confectionery drives over two-thirds of the absolute growth with Mondelez in the lead with a market share of 55 percent. After the acquisition of Cadbury in 2010 by US based parent company, Mondelez International the brand was rechristened Mondelez India.
Apart from India and China, the other middle income markets such as Brazil and Mexico also show the highest percentage of growth in the segment over the next five years. The overall confectionery market in the world generates total retail sales of $200 billion and it has exhibited a CAGR of 5.3 percent from 2000 to 2014.
The confectionery market has been broken down into three main sub-segments. They are chocolate confectionery with 56 percent, sugar confectionery with 32 percent and gum with 12 percent.
Euromonitor data reveals that four of the top five strongest growing confectionery categories include chocolate SKUs (stock keeping units). The consumers in both emerging as well as developers markets highly prefer the premium chocolates with tablets. This category has seen a strong growth and fine flavor with origin specific cocoa.
In the past five years, the confectionery market segment has witnessed a growth that is slightly lower at 4.3 percent CAGR. There has a decline in the gum in the large developed markets including the U.S. The confectionery is expected to report a 4.6 percent CAGR in the coming five years.
The tastes are changing in countries such as China. The younger consumers demand block chocolates to chocolate coated snacks. The chocolate is expected to be fastest growing sub-segment of confectionery resulting in around 60 percent of the increase in the absolute retail sales from 2014 to 2019.
Primarily, a strong correlation between the income per capita and consumption per capita of the confectionery should be supportive of the growth in the emerging markets. This is claimed to deliver a majority of the category growth in the next five years.