Sweet growth in India

1 April 2011 – During 2004 – 2009 the Indian confectionery market grew at a compound annual growth rate (CAGR) of 10.5%, placing it among the faster growing confectionery markets globally. However, this growth shows no signs of slowing, in fact, a recent report from Datamonitor states that India’s $1.2 billion (€847.6 million) confectionery market will grow at further increased rate of over 12% between 2009–2014. India is poised to climb the rankings of world’s largest confectionery markets by value from its current 25th position to 19th position by 2014.

For confectioners looking to offset dwindling sales in the West, India is becoming a very attractive option.

India boasts the second largest population in the world, with over 30% of the Indian population in the 0–14 age group, which is the primary target segment for confectionery manufacturers. These will be the prime movers for growth in the confectionery market in India.

The popularity of gifting Western chocolates rather than traditional Indian sweets during festivals like Diwali is growing due to increased product shelf life and well target marketing campaigns.

However, there are several obstacles that will inhibit growth in the market. High food inflation in India will indirectly affect the confectionery market. Also, the rising costs of raw ingredients eg cocoa and sugar will directly impact the input costs of low value sugar confectionery products, which tend to have lower price elasticity in India.