Demand for chocolates as a gift item has increased almost 40 per cent with the advent of the festive season already and is likely to rise further as dry fruit prices have increased substantially by 25-30 per cent, apex industry body Assocham said today.
"Adulteration in traditional sweets eroding consumer confidence along with dry fruit prices going through the roof and other significant multiple factors like growing acceptance of chocolates amidst varied Indian palates, attractive packaging, consistency in quality, growing gifting culture, rising urban affluence amid youth with high disposable incomes and a crazy sweet tooth together with other related factors are driving the demand for chocolates," according to a survey by the Associated Chambers of Commerce and Industry of India (Assocham) to ascertain the gifting trends this festive season.
Assocham, under the aegis of its social development foundation, interacted with about 1,000 consumers, traditional sweet shopkeepers, kirana stores, wholesale dry fruit traders and shopkeepers during the past fortnight in 10 cities of Ahmedabad, Bangalore, Chandigarh, Chennai, Delhi-NCR, Hyderabad, Jaipur, Kolkata, Lucknow and Mumbai.
Most of the consumers said, dry fruits would be the last thing on their minds as a gifting option this festive season as its prices have already skyrocketed and will rise further as Diwali draws closer.
Besides, a majority of these also said, they preferred chocolates to sweets as a gifting option considering the factors like longevity, health-related benefits, attractive packaging and others.
Almost all retails stores selling chocolate gift hampers said, they are selling like hot cakes and considering the massive rise in demand for the same they have booked orders in advance as Diwali draws closer.
Another significant factor that is fuelling chocolate demand during the festive season in India is that it can be easily ordered online and its timely delivery at the desired destination highlighted the Assocham survey.
Most of the dry fruit traders and shopkeepers said, the recent Rupee depreciation against major currencies had lead to an escalation of about 10-15 per cent in wholesale markets and the retail shoppers would have to cough up about 20-25 per cent more money.
Almost all sweet shop owners conceded that the demand and preference for sweets as a gifting option during the festive season has plummeted significantly, between 35-40 per cent or more due to the fear of adulteration. Most of them also attributed it to the propaganda by the chocolate industry, highlighted the Assocham survey.
"Chocolate confectionary makers have also increased their prices and reduced their pack sizes owing to the sky-rocketing input costs as prices for major ingredients like cocoa, milk and sugar have soared in both domestic/global markets and this will only lead to consumers tightening their purse strings further," Assocham said.
Growing at a compounded annual growth rate (CAGR) of about 25 per cent, India's chocolate industry's size is presently worth about Rs 5,000 crore and is likely to cross Rs 7,500 crore mark in the next couple of years while globally the chocolate industry is worth over $85 billion. Besides, India's per capita chocolate consumption is hovering at about 100 gm and urban centres comprise 35 per cent of the chocolate consumption in the country.
Cadbury is leading the pack with about 70 per cent market share followed by Nestle, Amul, Ferrero Rocher, Toblerone and others.