Final presentation - Chocolate Industry

1. College : SNJB’s COE, Chandwad.
Class : MBA 1st year.
Guidance By : Hon. Prof. Mr. U. S. Kasar Sir.
Industry : Chocolate Industry.
Presenters : Gaziyani Md. Hasnain
Rahul O. Bhandari
Khushbu Mutha
Bhagyashree Mankar
Abu Swaleh

2. Final Presentation

3. Nature of the Industry
1. The chocolate industry in India works at different levels that include
chocolate giants like Cadbury's , Dairy Milk, etc, small
chocolate manufacturers, chocolate retailers, chocolate importers
and people who make chocolates at home
2. Diversification and innovation is the need of the hour and chocolatiers
are exactly doing that to increase their client-base.
3. The population of India presents multiple avenues for companies to
foray into India. "The regulatory environment, too, has become
conducive for foreign players to operate in the country. There is
immense scope that the country presents to players in terms of hiring
home grown talent to grow business, given the educational boom.
This clearly means that the three main factors like demand for
products, conducive regulations and customized talent are abundant
in India, which makes it inevitable for foreign players to ignore India.

4. Players in the Industry
1. Cadbury's India Limited
2. Nestle India
3. Amul India
4. Gujarat Co-operative Milk Marketing Federation
5. Cocoa Manufactures and Processors Co-operative (CAMPCO)
6. Bars Count Lines Wafer Panned Premium
7. 5-Star, Milk
8. Mars chocolate
9. Krafts Food
10. Ferrero

5. Market share of top 3 and bottom 3 players
Cadbury Nestle Amul Mars Krafts food Ferrero
70% 24% 3% 1% 1% 1%
Market Share
70%
24%
3%
1%
1%
1%
Market share of top 3 and bottom 3 players
Cadbury Nestle Amul Mars Krafts food Ferrero

6. Classification Of Players
Market Leader
• Cadbury
Challengers
• Nestle India
• Amul India
Followers
• CAMPCO
• Bar Count
Nichers
• Mars Inc.
• Treat Perk
• Tiffins

7. Positioning and strategies of Key Players
1 - Dairy milk
• The Cadbury ad campaign designing
Team at Saatchi and Saatchi aimed at first
retaining shoppers and ensure that they do
not move to other brands. The Cadbury Rich
dry fruit collection was projected as the
ultimate gifting solution for festivals like Diwali.
2 - Amul India
 The tag line "for someone you love",
again symbolizing it as something very
precious for your loved one creating a niche
image.
3 – Nestle India
•Nestlé India put it, "It is the result of an
experience of 135 years that Nestlé gives us
‘Good Food, Good Life‘.“

8. Marketing Strategy Of Major Players
PRODUCT
A - PRODUCT VARIANTS
B - PRODUCT INNOVATIONS
C - PACKAGING
PRICE
A - VOLUME LED GROWTHSTRATEGY
B - HIRES AT KEARNEY TO CURBCOSTS
C - EARNINGS SENSITIVITYFACTORS
PLACE
A - PLANT LOCATIONS
B - DISTRIBUTION
C - NATURE OF RETAIL OUTLET
PROMOTION
A - Advertisements
B - Celebrities endorsements
C - From kids to youth

9. Worldwide Market share of all players of
Chocolate world

10. Professional Trade bodies
1. Fine Chocolate Industry Association (FCIA)
2. American Association of Candy Technologists (AACT)
3. National Confectioners Association
4. The Associated Chambers of Commerce and Industry of India

11. Background Of Top 3 Players
1- Cadbury
 John Cadbury was born in B’ham to
Richard Cadbury who was from a
wealthy Quaker family in U.K. in
1797.
 Establish cause was alcohol.
 Tea dealer in 1818 in leeds.
 Returning to B’ham in 1824 &
opened a shop at Bull Street.
 1831-rented factory for drinking
chocolate & cocoa.
Larger factory with his
brother Benjamin and started
selling 16 type of drinking
chocolates - largest till 1960s.

12.  Both brothers became partner in 1848 for 7 years.
 Founded factory in bournville in 1861- largest chocolate production in U.K..
 Opened an office in London & received a Royal Warrant as a manufacturer
of chocolate and cocoa to Queen Victoria in 1854.
 1897- Manufactured 1st milk chocolate. In 1899 factory employed 2,600
people and became corporate.
 1950- Cadbury opened its first overseas factory near Hobart, Tasmania.

13.  1969 - Cadbury merged with Schweppes to form Cadbury Schweppes. Schweppes
was a well-known British brand that manufactured carbonated mineral water and soft
drinks.
 Today Cadbury Schweppes is the largest confectionery company in the world,
employing more than 70,000 employees.

14. Cadbury India
 In India, Cadbury began its operations in 1948 by importing chocolates. It
today has 5 company-owned manufacturing facilities at Thane, Induri
(Pune), Malanpur (Gwalior), Bangalore & Baddi (Himachal Pradesh) & 5
sales offices in 5 metros. The corporate office is in Mumbai.
 It works as teams to convert products into brands.
 Cadbury enjoys a value market share of over 70% - the highest Cadbury
brand share in the world! The brand Cadbury Dairy Milk is considered the
"gold standard" for chocolates in India. The pure taste of CDM defines the
chocolate taste for the Indian consumer

15. Background Of Top 3 Players
2- Nestle
•Nestle was founded in 1867 in Geneva, Switzerland by
Henri Nestle. Nestle's first product was "Farine Lactee
Nestle", an infant cereal.
•In 1905, Nestle acquired the Anglo-Swiss Condensed Milk
Company.
•Nestlé's relationship with India started in 1912.
•It began trading as The Nestlé Anglo-Swiss Condensed
Milk Company (After India's independence in 1947, the
economic policies of the Indian Government emphasised
the need for local production.
•Nestlé responded to India's aspirations by forming a
company in India and set up its first factory in 1961 at
Moga, Punjab.
Henri o nestle

16. •Nestlé India’s first production facility, set up in 1961 at Moga (Punjab), was followed
soon after by its second plant, set up at Choladi (Tamil Nadu), in 1967. Consequently,
Nestlé India set up factories in Nanjangud (Karnataka), in 1989, and Samalkha
(Haryana), in 1993.
•This was succeeded by the commissioning of two more factories - at Ponda and
Bicholim, Goa, in 1995 and 1997 respectively.
•The seventh factory was set up at Pantnagar, Uttarakhand, in 2006.
The 8th Factory was set up at Tahliwal, Himachal Pradesh, in 2012.
Nestle India

17. •Nestle India is a subsidiary of Nestle S.A. of Switzerland. Nestle India manufactures a
variety of food products such as infant food, milk products, beverages, prepared dishes
& cooking aids, and chocolates & confectionary.
• Some of the famous brands of Nestle are NESCAFE, MAGGI, MILKYBAR, MILO, KIT
KAT, BAR-ONE, MILKMAID, NESTEA, NESTLE Milk, NESTLE SLIM Milk, NESTLE
Fresh 'n' Natural Dahi and NESTLE Jeera Raita.

18. Background Of Top 3 Players
3- Amul
• Formed in 1946, is a dairy
cooperative movement in India.
• A brand name managed by Gujarat
Co-operative Milk Marketing
Federation(GCMMF)
• Jointly owned by 2.79 million milk
producers in Gujarat
• Spurred the White Revolution of
India, which has made India the
largest producer of milk and milk
products in the world.

19. • Overseas markets - Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore,
Hong Kong and a few South African countries
• Fresh plans of flooding the markets of Japan & Sri Lanka.
• Dr Verghese Kurien, former chairman of the GCMMF -the man behind the success of
Amul.
• Has a 15% market share in the Rs 15,000 crore milk category, and a 37% share in
the Rs 900 crore organized ice-cream segment.
Amul Abroad

20. Background Of Bottom 3 Players
1- Mars-wrigley
• Type : private
• Industry : confectionary
• Founded : 1911 in Tacoma, Washington, USA.
• Founder : Frank C.Mars
• Products : milky way, bounty, mars, snickers.
• Revenue: US$30 billion

21. Background Of Bottom 3 Players
2- Kraft Foods
• Type : public
• Industry : Food Processing.
• Founded : Englewood, Chicago, USA
• Products : ice cream, cheese, milk.
• Revenue: US$ 40.4 billion

22. Background Of Bottom 3 Players
3-Fererro
•Type : private
•Industry : Food
•Founded : 1946
•Founder : Pietro Ferrero
•Products : confectionary.
•Revenue : 6.2 billion euros

23. About CEOs Of Top Players
1 - Irene Rosenfeld(CEO of Mondelez International Inc., owner of Cadbury)
Born May 3, 1953
Married with 2 Daughters
Fortune 500 Rank: 53
Compensation: $26.3 Million
Education:
Ph.D. in Marketing and Statistics
Master of Science in Business
Bachelor of Arts in Psychology from Cornell University
Childhood career ambition: President of the United States
Favorite Kraft product: Kraft macaroni and cheese and Oreo cookies are high up on the list too.
Hobbies: Play the piano and enjoys rollerblading

24. About CEOs Of Top Players
2 - Paul Bulcke(CEO of Nestle)
•Paul Bulcke (born 1954), is a Belgian businessman who was appointed Chief
executive officer (CEO) of Nestlé on 20 September 2007 and officially started in his new
role in April 2008.
•He graduated as a commercial engineer at the Katholieke Universiteit Leuven and is
an alumnus of the Vlerick Leuven Gent Management School. He also attended the
program for Executive Development at the Swiss leading business school International
Institute for Management Development (IMD) in Lausanne.
•In 1979, aged 25, he started working for the Nestlé group and worked in different
countries, including Switzerland, Spain, Belgium, Peru, Ecuador, Chile, Portugal, Czech
Republic and Germany. Before his appointment as CEO of Nestlé, he was the Head of
America (EVP of Americas divisions).
•Bulcke has described Nestlé under his tenure as 'une force tranquille' (English: 'calm
strength'). He is known for having a reserved, quiet personal manner.
•On 25 May 2012, he received the VMA Award from the Vlerick Leuven Gent
Management School for his "lifelong career, which has been distinguished by sustained
integrity, exceptional management capacity and inspiring leadership“.

25. Organizational Structures of Chocolate Companies
1 -Cadbury
2 - Nestle

26. Corporate Social Responsibility
1 - Cadbury
A - Migratory birds stop
over at Bangalore factory
B - Pioneering cocoa cultivation in
India
C - Bangalore factory: the sun
shines at night
D - Non-formal school set up by
Cadbury for children of migrant
workers in Baddi

27. Corporate Social Responsibility
• Nestle’s education programs have reached 9 million people
•Nestle India supports local schools, themaintenance of public parks and green belts.
•Water Education Programme in India, informed the farmers on the proper use of water.
•Nestle provides rural farmers with technical support via Chilli Farming Project.
2 - Nestle
Continual improvement of the environmental performance along the value chain

28. Regulatory Bodies
1- ICCO (The International Cocoa Organization)
2- NCA( National Confectioners Association)
3- FSSAI (The Food Safety and Standards Authority of India)
Actions by regulatory bodies
1. China to Establish National Standard for Food Grade Paraffin Wax
2. India to Impose Trans Fats Limits for Packaged Foods
3. India Releases Draft Changes to Labeling Requirements
4. Sugarless Gum Included on Brazil’s Proposed Retaliatory Tariffs List
5. South Korea Proposes Zero Tolerance for Salmonella in Cocoa Products and
Chocolate

29. Issues Affecting Chocolate Industry
1. Child Labor
2. Deforestation 3. Full sun cocoa
Solutions By Governments
1-Education 2-Shade cacao

30. Dec ' 09 Dec ' 08 Dec ' 07 Dec ' 06 Dec ' 05
Sources of funds
Owner's fund
Equity share capital 31.07 32.18 33.20 34.36 35.71
Share application money - - - - -
Preference share capital - - - - -
Reserves & surplus 499.73 432.22 372.94 357.73 398.10
Loan funds
Secured loans 2.28 32.02 1.28 3.26 3.71
Unsecured loans 9.89 9.68 7.48 6.75 4.51
Total 542.96 506.11 414.90 402.10 442.03
Uses of funds
Fixed assets
Gross block 724.75 586.94 544.77 430.21 395.50
Less : revaluation
reserve - - - - -
Less : accumulated
depreciation 372.09 335.55 299.18 265.13 234.88
Net block 352.66 251.39 245.59 165.08 160.62
Capital work-in-progress 152.53 123.86 25.58 82.18 29.55
Investments 18.01 2.92 298.49 253.42 258.21
Net current assets
Current assets, loans &
advances 576.62 581.89 246.03 189.55 184.80
Less : current liabilities &
provisions 556.85 453.96 400.79 301.81 218.50
Total net current assets 19.77 127.93 -154.77 -112.26 -33.70
Miscellaneous expenses
not written - - - 13.68 27.35
Total 542.96 506.11 414.90 402.10 442.03
Financial Statement Of Cadbury

31. Dec ' 12 Dec ' 11 Dec ' 10 Dec ' 09 Dec ' 13
Sources of funds
Owner's fund
Equity share capital 96.42 96.42 96.42 96.42 96.42
Share application money - - - - -
Preference share capital - - - - -
Reserves & surplus 2,272.33 1,701.99 1,177.54 759.00 484.85
Loan funds
Secured loans 0.01 0.24 0.84 - -
Unsecured loans 1,189.48 1,049.95 970.03 - -
Total 3,558.24 2,848.60 2,244.82 855.41 581.27
Uses of funds
Fixed assets
Gross block 4,844.28 4,368.68 2,552.21 1,854.70 1,640.79
Less : revaluation
reserve - - - - -
Less : accumulated
depreciation 1,474.97 1,164.41 976.46 841.96 744.59
Net block 3,369.31 3,204.27 1,575.75 1,012.74 896.20
Capital work-in-progress 294.71 344.08 1,418.64 348.91 79.63
Investments 851.08 364.86 134.37 150.68 203.26
Net current assets
Current assets, loans &
advances 1,799.17 1,250.71 1,333.03 1,094.70 903.36
Less : current liabilities &
provisions 2,756.03 2,315.32 2,216.96 1,751.61 1,501.18
Total net current assets -956.86 -1,064.61 -883.93 -656.91 -597.82
Miscellaneous expenses
not written - - - - -
Total 3,558.24 2,848.60 2,244.82 855.41 581.27
Financial Statement Of Nestle

32. Financial Statement of Mars Inc.

33. Financial Statement of Kraft's Food

35. Nestle Ratio Analysis

36. Nestle Ratio Analysis

37. Nestle Ratio Analysis

38. Nestle Ratio Analysis

39. Nestle Ratio Analysis

40. Nestle Ratio Analysis

41. Krafts food Ratio Analysis

42. Krafts food Ratio Analysis

43. Krafts food Ratio Analysis

44. Krafts food Ratio Analysis

45. Krafts food Ratio Analysis

46. Mergers and acquisitions
1. 1948 Cadbury launches operations in
India under the name Cadbury-Fry
India
2. 1967 Launches Cadbury 5-Star
3. 1968 Launches Cadbury Gems
4. 1977 The company changes its name
to Cadbury India when it goes public
5. 1982 The company’s name is yet again
changed to Hindustan Cocoa Products
6. 1984 Launch of Cadbury Dairy Milk,
which is now the company’s flagship
product
7. 1989 Hindustan Cocoa Products once
again becomes Cadbury India
8. 2003 Cadbury India delists itself from
the Bombay Stock Exchange
9. 2010 Cadbury India becomes a part of
Kraft Foods with the latter buying
Cadbury’s worldwide operations for $19
billion

47. 1. Cadbury merged with J. S. Fry & Sons in 1919, and Schweppes in 1969. Cadbury was a
constant constituent of the FTSE 100 from the index's 1984 inception until the company
was bought by Kraft Foods in 2010
2. Cadbury merged with drinks company Schweppes to form Cadbury Schweppes in 1969.
3. In 1978 the company acquired Peter Paul, the third largest chocolate manufacturer in the
United States for $58 million
4. In 1986, Cadbury Schweppes sold its Beverages and Foods division to a management
buyout known as Premier Brands for £97 million.
5. In March 2007, it was revealed that Cadbury Schweppes was planning to split its
business into two separate entities: one focusing on its main chocolate and confectionery
market; the other on its US drinks business
6. In 2003, Cadbury dropped the 's' from its name and renamed the brand to Cadbury. The
reason behind this change was because the company found that it was a much more
suited, rounded name than the previous "Cadbury's”
7. On 7 September 2009 Kraft Foods made a £10.2 billion (US$16.2 billion) indicative
takeover bid for Cadbury.
8. On 19 January 2010, it was announced that Cadbury and Kraft Foods had reached a deal
and that Kraft would purchase Cadbury for £8.40 per share, valuing Cadbury at £11.5bn
(US$18.9bn).