1. CHOCOLATES

2. HISTORY
• Used as a drink for nearly all of its history
• Excavation by archaeologists in November 2007 revealed
cultivation of cacao in Peurto Escondido from about 1100-
1400 BC.
• Played a major role in the royal and religious events of
ancient civilizations.

3. • Cacao beans also used as tax
• First cocoa bean brought to Europe by Columbus
• Europeans compartmentalized its use as sweets and desserts.
• Industrial Revolution brought about major changes in the manufacturing
process.

4. Breakthroughs
• At the end of the 18th century, the first form of solid chocolate was invented in
Turin by Doret. This chocolate was sold in large quantities from 1826 by Pierre
Paul Caffarel
• In 1819, F. L. Cailler opened the first Swiss chocolate factory.
• In 1828, Dutchman Coenraad Johannes van Houten patented a method for
extracting the fat from cocoa beans and making powdered cocoa and cocoa
butter. Van Houten also developed the "so-called" Dutch process of treating
chocolate with alkali to remove the bitter taste. This made it possible to form the
modern chocolate bar.

5. • It is believed that the English company, J. S. Fry & Sons made
the first chocolate for eating in 1847, followed in 1849 by the
Cadbury brothers.
• Daniel Peter, a Swiss candle maker, joined his father-in-law's
chocolate business. In 1867, he began experimenting with milk as
an ingredient. He brought his new product, milk chocolate, to
market in 1875.
• He was assisted in removing the water content from the milk to
prevent mildewing by a neighbour, a baby food manufacturer
named Henri Nestlé

6. • Rodolphe Lindt invented the process called conching, which
involves heating and grinding the chocolate solids very finely to
ensure that the liquid is evenly blended.
• This enabled Milton Hershey to make chocolate even more
popular by mass producing affordable chocolate bars.
• In 1908, The Hershey Chocolate Company makes the first milk
chocolate bar with almonds

7. • In 1912, The Whitman Company produced the boxed assortments
called Whitman's Samplers. This is the first company to have a drawing
of different chocolates located in one box
• In 1914, L. S. Heath & Sons, Inc. makes the first Heath Bar in
Robinson, Illinois.
• In 1973, The Cadbury Company opens Chocolate World theme park
in Bournville, England.

8. Facts and Figures
• Much of the world’s cocoa comes from West Africa, which provides
70% of total output. The two main suppliers are the Cote d’lvoire and
Ghana.
• Most significant producer outside of this region is Indonesia.
• In these countries the cocoa beans are typically grown on small family
farms. Most of these are only two to three hectares in size. Each farm
produces around one tonne of beans each year.

9. • Farmers grow around three million tonnes of cocoa beans each year. Of
these, about 700,000 tonnes go to the USA. UK manufacturers import
about 215,000 tonnes.
• Global production is about 3.5 million tonnes, valuing annual
production of the commodity at about USD 10 billion, roughly one-tenth
of the value of sugar output. The small size makes it difficult for the
market to absorb significant inflows and outflows from massive global
investment funds.

10. • Chocolate needs to be distributed directly, unlike other
FMCG products like soaps and detergents, which can be
sold through a wholesale network. 90% of chocolate
products are sold directly to retailers.

11. • Chocolate manufacturers recognise that the small growers are the
industry’s lifeblood, and that our enjoyment of chocolate products
depends on their wellbeing.
• So, the industry is working with other organisations on the ground in
West Africa on a series of programmes designed to improve the
economic and social wellbeing of the cocoa farming villages and to
ensure that small farmers secure a sustainable future.

12. International Trends
• Research related the consumption of chocolates with several health
benefits such as reduced stroke risk, cholesterol and blood pressure,
among others.
• Mars, Incorporated is proud to be the first global chocolate company to
commit to fundamentally changing the way sustainable cocoa farming
practices are advanced by aiming to certify its entire cocoa supply as
being produced in a sustainable manner, by 2020.

13. • The widespread use of children in cocoa production is controversial
not only because of the usual concerns about child labor and
exploitation, but also because up to 12,000 of the 200,000 children
working in Ivory Coast, the world's biggest producer of cocoa, may be
victims of human trafficking or slavery.
• Gift giving: Like flower shops, these businesses often focus on themed
chocolates and delivery

14. • Bulk Candy: Offering a wide assortment of candies of all types
(including non-chocolate), these stores often charge by the
pound...or half pound!
• Premium or Unique: High-end, specialty items, imports from
areas with historical processes
• Ethical: Free trade or other, quality products produced, process
and delivered in a certifiably ethical and/or environmental
manner.

15. Per Capita Chocolate
Consumption
Consumption (in lb)
1. Switzerland 22.36
2. Austria 20.13
3. Ireland 19.47
4. Germany 18.04
5. Norway 17.93
6. Denmark 17.66
7. United Kingdom 17.49
8. Belgium 13.16
9. Australia 12.99
10. Sweden 12.90
11. United States 11.64
12. France 11.38
13. Netherlands 10.56
14. Finland 10.45
15. Italy 6.13

16. Indian Market
• The Indian chocolate industry is extremely fragmented with a range of products
catering to a variety of consumers. We have the bars/slabs, jellies, lollipops,
toffees and sugar candies.
• As per Euromonitor study, Indian candy market is currently valued at around
USD 664 million, with about 70%, or USD 461 million, in sugar confectionery
and the remaining 30%, or USD 203 million, in chocolate confectionery
• Cadbury is the market leader with 72% market share
• The global chocolate market is worth $75 billion annually
• The per capita consumption of chocolate in India is 300 gram compared with 1.9
kilograms in developed markets such as the United Kingdom

17. • Average summertime temperatures reach 43 degrees Celsius in India.
Chocolate melts at body temperature of 36 degrees.
• Over 70 per cent of the consumption takes place in the urban markets
• Margins in the chocolate industry range between 10 and 20 per cent,
depending on the price point at which the product is placed
• The chocolate wafer market (Ulta Perk etc) is around 35 % of the total
chocolate market and has been growing at around 13% annually

18. Drivers and Challenges
• Drivers: Opportunity to expand due to low penetration, strong tradition
of gifting sweets, attractive pricing driving volumes, demand from new
segments, innovation through brand and product variants.
• Challenges: Inflationary pressures on raw material prices, lack of
government initiative, and duopolistic element of the market.

19. Stakeholders

20. • Banking and insurance services,
• Packaging firms,
• transport specialists.
• Occasions
• Users

21. Individuals
Florists
Families
Consumers
Use as change Restaurants
Other
manufacturers

22. People
gifting Women
Children Individuals Men
Senior
Citizens

23. Working
Diabetic women
Women
Calorie-
Conscious Women Mothers
Women
Housewives

24. Men in the
service
sector
Calorie
Conscious Diabetic
Men
men Men
Businessmen

25. With other health
issues
With Senior Living alone
diabetes Citizens
Living with
children

26. Corporate
Gifting
While
visiting
On Occasions People Gifting friends and
relatives

27. Joint Nuclear
Families
Families Families

28. Bakeries and
pastry shops
Using
Serving
chocolates for
Restaurants chocolates
making
with the bill
desserts
Ice cream parlours
and milk shake
centers

29. Manufacturers of
other chocolate
related products
Manufacturers of
Ice cream Other
chocolate
manufacturers manufacturers
cookies
Manufacturers of
products like
chocolate sauce

30. By toll tax
By Shops Use as change collection
points

31. Delivering
chocolates with
bouquets
Making Making bouquets
Chocolate Florists with chocolates
bouquets placed in between

32. Top 10 global
confectionary companies
Company Net Sales 2010 (US$ millions)
1. Kraft Foods Inc (USA) 16,825
2. Mars Inc (USA) 15,000
3. Nestlé SA (Switzerland) 11,265
4. Ferrero Group (Italy) 8,763
5. Hershey Foods Corp (USA) 5,703
6. Chocoladefabriken Lindt & Sprüngli 2,602
AG (Switzerland)
7. Yildiz Holding (Turkey) 2,180
8. August Storck KG (Germany) 2,000
9. Arcor Group (Argentina) 1,650
10. Meiji Holdings (Japan) 1,599
Reference: Candy Industry, January 2011

33. Indian Players
• The volume of chocolate produced in India in a year is around
30,800 tons.
• The major players in the chocolate market are, Cadbury India
Ltd, and Nestle India Ltd. Together these two companies
constitute nearly 90% of the Chocolate Market in India. The other
players are Amul Chocolates, ITC Chocolates.

34. Value Parameters
• Pricing*
• Offerings in every category*
• Excitement*
• Value for money#
• Taste#
• Calorific Value#
• Breaking ritual (As expressed in the advertisements of Nestle Kit Kat)
• Flavors and Fillings
• Shelf Life
• Availability
• Package size
*As expressed in the VISION statement of Cadbury’s India.
#From Advertisements of Nestle Munch

35. Front end supply chain
• Producers: farmers
• Raw materials: e.g. cocoa beans, sugar, milk, wood for paper
wrappers, aluminium for foil wrappers etc.;
• Manufacturers: e.g. chocolate factories, sugar mills and
refineries and milk processors;
• Distributors: e.g. warehouses, transport companies (delivery
trucks);
• Retailers: e.g. retail stores, supermarkets, vending machines, etc.;
• Service providers: e.g. designers, advertisers, market
researchers, transport providers etc.;
• Consumers: e.g. everyone, manufacturers of other chocolate
products, the export market.

36. Strategy Canvas
10
9
8
7
6
5
4 Cadbury's
3 Nestle
2
1 Amul
0 ITC

37. Factories in india
• 6 factories, 1 center for cocoa operations

38. Need Gaps according to Consumer
Insights
• Lack of low-range Sugar Free chocolates
• Lack of good Gifting Options
• Very low penetration of online purchase
• Absence of Chocolate Vending Machines

39. Need Gaps (Front End)
• Very limited reach to interiors due to low
melting temperature of chocolates

40. Need Gaps (Back End)
• Very little Cocoa Production in India

41. Frequency of Consumption
At least once a month
1%
8% 12%
At least once a week
30% At least once a year
48% Every day
I cannot eat chocolate for
1% health reasons or allergy
Very rarely

42. Favourite form of chocolates
Brownies
1% 4% Candies
Chocolate bars
39%
37% Chocolate Cake
Cookies
7% 7% Ice Cream
1% Powder
4%
Told you, it just needs to
be chocolate

43. Type of chocolate preferred
Chocolate with fillings
5% 4% 5%
Chocolate with nuts
14%
31% Dark Chocolate
15% Just like chocolates in
any form
Milk Chocolate
26%
White Chocolate
others

44. Least preferred type
candys
1%
14% Can't pick any of
31% 4%
these, love them all
10% Chocolate with fillings
Chocolate with nuts
14%
26%
Dark Chocolate
Milk Chocolate
White Chocolate

45. Preference
37% 40%
Domestic Premium
Brands
Imported Premium
Brands
Moderately Priced
23% Brands

46. Chocolates should not have
Caffeine
6% Calories
9% 11%
6%
I LOVE everything
about chocolates
27% 41%
Milk
Sugar
The addictive flavour
that makes me eat it all
the time

47. Buying chocolates online
2% 5%
No, and I never even
44% intend to
No, but I can consider it
49%
Yes, all the time
Yes, but very rarely

48. Sugar free Chocolates
29%
No
Yes
71%

49. Tried sugar free chocolates
I do not like the taste but
will go back to it as it is
14%
healthier
34%
I do not like the
23% taste, and will never buy
it again!
I like the taste and will
29% go back to it for its taste
I like the taste but will
still prefer the regular
chocolates

50. Not tried sugar free chocolates
15%
37%
Would like to try it for
the calorific value
Would like to try it just
for the sake of it
48%
Would never even
consider trying it

51. Guilt feeling in chocolate
consumption
5%
7% Absolutely no guilt
49% Maybe a little, but no I
21%
don't feel guilty
Slightly guilty
18% Very guilty
Extremely guilty

52. Gifting Chocolates
2%
12%
18%
I don't gift chocolates
Very rarely
36%
Sometimes
32% Quite frequently
All the time

53. Are exclusive chocolate shops
overpriced?
3%
7%
39% 18%
Not at all
Marginally overpriced
Little overpriced
Highly overpriced
33%
Extremely Overpriced

54. Have you ever bought a chocolate
bouquet?
15%
37%
No, and not even
interested
No, but would like to
48%
Yes

55. Company while consuming
chocolates
30%
46%
alone
family
24% friends

56. Percentage of people from amongst
people who feel guilty that have tried
sugar free chocolates
44%
56% No
Yes

57. Percentage of people from amongst
people who do not feel guilty that
have tried sugar free chocolates
22%
No
Yes
78%

58. People who feel guilty and haven’t
tried sugar free chocolates
5%
17%
Would like to try it for
the calorific value
Would like to try it just
for the sake of it
78%
Would never even
consider trying it

59. Thank You
Tanushree Prasad