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India – Future Eldorado For The Global Cocoa Industry

As cocoa consumption slows in developed countries, companies in the chocolate value chain are looking for other sources of growth.

In the list of potential new outlets, India occupies a major place. Analysts say the world’s largest democracy may well drive the growth of the global cocoa industry in the coming years.

When we talk about the chocolate consuming countries in the world, India is really not the country we think of first: its annual consumption of chocolate per capita is below 500 grams.

Such a level remains well below the world average (900 grams) as well as that of Japan, the first Asian consumer of chocolate with 2 kg.

It is even residual when compared to the average per capita in Europe or the USA, which varies from 5 to 8 kg per year, according to the International Cocoa Organization (ICCO).

It is even residual when compared to the average per capita in Europe or the USA, which varies from 5 to 8 kg per year, according to the International Cocoa Organization (ICCO).

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In addition, the per capita consumption of chocolate confectionery represented only the equivalent of 10% of the world average in 2018.

India is therefore a small inch in the global cocoa industry. And yet. In spite of this very limited weight, the Asian giant should play a leading role on the world stage chocolate a few years.

A growing appetite that could explode in the future

With its 1.3 billion inhabitants, India is the region of the world where the consumption of cocoa products has registered the most significant increase in recent years.

While it is true that chocolate is not part of Indian gastronomy, the product is increasingly winning the hearts of consumers, like the rest of Asia.

According to a report published in 2017 by Mintel, the London specialist in market research, the second-most populous country in the world consumed nearly 228,000 tonnes of chocolate products in 2016.

With such a volume, the country shows an increase in its year-on-year consumption of 13%, the highest growth rate in the world.

The second most populous country in the world consumed nearly 228,000 tonnes of chocolate products in 2016. With such a volume, the country shows an increase in its consumption from one year to the next of 13%, ie the rate of the highest growth in the world.

More generally, between 2011 and 2016, demand for chocolate will have jumped by 50%, a record level.

For observers, several factors explain this boom in the Indian chocolate market. First, the increase in the income of the middle class which contributes to the increase in spending on products considered to be luxury. Added to this factor is the change in Indian consumption habits.

Indeed, more and more Indians prefer chocolate products to traditional sweets and consume them at various times of the day as well between meals, in the evening as in the afternoon.

In addition, advertising campaigns which attribute health benefits to chocolate, as well as the ever-declining cost of access to industrial chocolate, are contributing to a growing increase in sales which currently reach $ 2 billion per year.

In addition, advertising campaigns that attribute health benefits to chocolate, as well as the ever-declining cost of access to industrial chocolate, are contributing to a growing increase in sales which currently reach $ 2 billion per year.

According to experts, the industry should continue to grow in the Indian market which has a real tradition of sweets and sweet treats, unlike a country like China which is also courted by the sector.

For all these reasons, according to ICCO, India is thus becoming one of the pivotal regions of world consumption.

According to the intergovernmental group, demand for semi-finished cocoa products used in the manufacture of chocolate bars, ice cream or frozen desserts, is notably forecast to grow by 36% to 96,735 tonnes by 2023.

“India is the only place in the world where I see huge potential for consumption in terms of volume. The country is the first potential market for cocoa in the future ”, estimates Michel Arrion, executive director of ICCO.

Many opportunities

For the world cocoa industry, the Indian market appears to be a real boon, all the more so as the growth in sales is stalling in Europe and the USA. In these markets now considered saturated, growth prospects are limited according to experts.

And even if the two locomotives will continue to weigh heavily in the volumes consumed, the increase in customer purchases should remain marginal in the coming years. Many companies have already understood the opportunity presented by the Indian market and are sharpening their weapons.

The American multinational Mondelez is the best-established company with its brand of milk chocolate Cadbury Dairy Milk which is the first in the country. The group holds more than 60% of the market share far ahead of the Swiss Nestlé, the Italian Ferrero and his compatriot Hershey.

For African countries which provide more than 70% of the world cocoa supply year after year, good consumption in India should make it possible to absorb production, which continues to grow and offset the stagnation of purchases in India. Europe and the USA, the main traditional markets.

For African countries which provide more than 70% of the world cocoa supply year after year, good consumption in India should make it possible to absorb production, which continues to grow and offset the stagnation of purchases in India. Europe and USA.

More generally, India’s assertion as a stronghold in the consumption of chocolate should be placed in a context where Asia is increasingly emerging as a nerve center in cocoa processing. The region is in fact, along with Oceania, the main contributor to the growth of grindings in the world and has already overtaken North America.

Hope Olodo

Source Agence Ecofin
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