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Confectionery Market in India

Thursday, July 19, 2012

The confectionery market of India includes sugar boiled confectionery, hard-boiled candies, toffees and other sugar-based candies. Sugar boiled confectionery had penetrated an estimated 15% of the households only further suggesting a large potential for growth. Considering the 22% penetration in the urban market, the confectionery industry could hope to be in for great times. 

In India the annual per capita consumption of branded confectionery is still under 100 gms.  Hard-boiled candy is reserved for the small-scale sector.  There are about 5,000 units catering to the local markets.  The big players have used a mix of franchise arrangements (with small units) and product formulations to get out of the reservation mode.

The total contribution of the sugar boiled confectionery market in the organized sector, comprise plain, hard-boiled candies, toffees, éclairs and gums is around Rs. 20 billion. Add to this the unorganized sector and the market for all types of confectionery is Rs. 50 billion.  However, in terms of value the organized sector commands 60% of the market share. With the exit of MNCs and other established organized players from very low priced (25 paise) category, the unorganized sector has grown very fast. MNCs and high-powered advertising support substitute products like chewing and bubble gums.  With Rs 3,250 million market share, the gum and mint market is growing at a rate 10 to 15% annually.  Fruit and mint rolls being marketed by companies with sound strategies are going ahead rapidly.

 The organised market is a dominated giant player like Parry and Nutrine. The Perfetti India (Alpenliebe), Warner Lambert, General de Confiteria has made their presence felt. The MNC chocolate majors like Cadbury India (Googly, Gollum and Frutus) and Nestle (Polo Mints) have also jumped into the confectionery competition.  Cadbury India has had a limited success.  Nestle, known best for its Polo mints, has also had only a limited success in the confectionery market under Allen's banner. Perfetti India's Alpenliebe, however, has made it big in the recent couple of years. Indian brands like Maha Lacto with the production of 15,000 tonnes, Aashay 7000 tonnes, Coca Naka 4000 tonnes, Dishum 3,000 tonnes, Honey Fab 1,500 tonnes and Eclairs are the prominent offerings in the Indian confectionery market.


Several global players like Bassetts’; Maynards, Pascall and Trebor were trying to enter the Indian market. The initial entry-level brands are: Maynards' Wine Gums; Bassett's Liquorice of all sorts; Trebor Extra strong mints, mighty mints and softy mints.Polo, Alpenliebe, Pan Pasand, Melody, Poppins, Hajmola, Kismi and Coffy Bite have been quite successful in the Indian market. Each one has its USP and, perhaps, sells because of it. Ravalgaon's Pan Pasand was the first candy with 'paan' flavour.  Parle's Melody is a toffee-chocolate-eclair hybrid.  The same company's Poppins has a unique form and sells in a variety of colour.  Dabur's Hajmola Candy tastes like a churan, a sweet and sour mixture of assorted traditional digestives. Parle's Kismi entered as a unique toffee slab.  Parry's Coffy Bite came with a mixed taste of its own. Some of the more recent successes are Nestle's Polo, which is a mint with a hole. Interestingly, the hole, it is claimed, is the USP.  Perfetti's Alpenliebe is a caramel candy.  Alpenliebe, priced at Rs 5 for a 35 gm roll, is a success in urban areas.  At the lower end of the market, the movement from unbranded to local brands is evident.

 There have been three large operators, Nutrine Confectionery, Parry's Confectionery (PCL) Parle Products and Ravalgaon Sugars.  With de-reservation, the large organized sector can look forward to a big potential for expansion.

 A fascinating market phenomenon emerged.  When brands like Coffy Break, Eclairs, Coffee Bite, and Coconut Cookies hit the market in the mid-1980s, Parle's Poppins started disappearing from urban stores.  But Poppins re-appeared and is selling well. There has been a locational shift.  Poppins is found in rural and semi-urban general stores and the pan-beedi shops.  A strategic decision to position itself in a different market saved the brand.

 Chewing gums and mints are a preferred worldwide with the new-style-living, but in India, the category did not boost for quite a while.  It has now caught on:  from Rs 500 million to Rs 3000 million in just three years and is currently placed at Rs 3,500 million. It must be due to product quality and effective marketing - which includes brand equity.  In chewing gum, Perfetti leads, followed by Warner Lambert and then Wrigley's, which came late and has a distribution alliance with Parry's.  In bubble gum, Perfetti leads with Big Babool, followed by GDC's Boomer.

 Italian parent Perfetti entered the country in 1994.  Agrolimen of Spain followed it, which is a 51:49 joint venture between General de Confiteria and Dabur India.  Dabur has since withdrawn from the joint venture; General de Confiteria launched bubble gum with the brand, Boomer, which is targeted at kids for sale. Perfetti also introduced three products, Center Fresh, Big Babool and Brooklyn, with designed segmentation:  Center Fresh, available in three flavours, targeting the entire market; Big Babool targeted at children in the age-group upto 5 years; Brooklyn, a stick chewing gum, meant for the teenagers. Warner Lambert has reinforced its interest, which launched Clorets chewing gum positioned as a mouth freshner while Chiclets is targeted at teenagers.


Confectionery (Including Edible Gums)


Demand: Past and Future

Year                       Rs bn

2000-01               16.5

2001-02               17.6

2002-03               18.9

2003-04               20.15

2004-05               21.7

2005-06               23

2006-07               23.75

2007-08               25.4

2008-09               26.8

2009-10               28.2

2014-15               36


Market Growth Rates

1990-91 - 1996-97    8.9%

1996-97 - 2001-02    7.3%

2001-02 - 2006-07    6.4%

2004-05 - 2009-10    5.4%

2009-10 - 2014-15    5.0%





Product Variation

Type                  Share (%)

Plain candies  43

Toffees              39

Adult Candies        9

Gums                3

Eclairs               6

Source: Ministry of Food Processing Industries

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