Sector Trend Analysis – Confectionery products in India

Global trade overview of confectionery products

India was the fifty-eighth largest global market for confectionery products with imports valued at US$107.9 million and 42.6 million kilograms in 2021. India experienced a compound annual growth rate (CAGR) of 5.7% as imports increased from US$86.5 million in 2017 while volume of confectionery product imports also increased by a CAGR of 15.4% from 2017. Canada was the sixth largest market for confectionery, accounting for 4.0% of the total world market share in 2021 (representing US$1.6 billion and 380.3 million kilograms.

India's trade overview of confectionery products

India has a diverse supply network of confectionery products. The top three suppliers of confectionery products to India were Bangladesh (US$14.4 million, 13.5 million kilograms ), Singapore (US$13.3 million, 4.8 million kilograms) and Italy (US$10.7 million and 1.2 million kilograms) in 2021. Canada was ranked India's eighty-fifth largest supplier even though Canada did not supply India with confectionery products in 2021. In 2020, despite Canada supplying India confectionery products worth US$34,528 and 5,941kilograms, (a decrease of 27.3% in CAGR from imports valued at US$89,805 in 2017), Canada remains largely absent from this market registering a 0.04% and 0.02% value/volume market share.

Top imported confectionery products to India were chocolate and cocoa preparations in packings of <=2 kg (HS code 180690) valued at US$41.7 million, 9.6 million kilograms, followed by sugar confectioner not containing cocoa (HS code 170490) US$27.8 million, 22.4 million kilograms and chocolate and other cocoa preparations in blocks, slabs or bars (HS code 180620) valued at US$19.4.4 million, 5.8 million kilograms in 2021.

Top five global confectionery product suppliers by top three products (HS codes) to India, in US$ millions, historical

Canada's performance

Canada was ranked as the eighty-fifth largest confectionery product supplier to India even though Canada did not supply India with confectionery products in 2021. India did import US$34,528 of confectionery products from Canada in 2020, representing a decrease in CAGR of 27.3% of confectionery product imports from US$89,805 registered in 2017. Volume of confectionery product imports from Canada also decreased 11.0% from 8,302 kilograms in 2017 to 5,941 kilograms in 2020.

India's top confectionery product imports from Canada were chocolate and other preparations containing cocoa (HS code 180690) valued at US$34.5 thousand, 5,932 kilograms, chocolate and other preparations containing cocoa, in blocks, slabs or bars (HS code 180632) worth US$2.1 thousand, 39 kilograms in 2019 and sugar confectionery not containing cocoa (HS code 170490) valued at US$61, 9kilograms) in 2020.

Canada's confectionery product global export market

In 2021, Canada exported US$2.2 billion of confectionery products to global markets, representing an increase in CAGR of 3.0% from exports valued at US$1.9 billion in 2017. The U.S was the largest market (94.9% market share) valued at US$2.1 billion, followed by Mexico (3.1% market share) US$69.1 million in 2021, also representing the largest increase in CAGR of 55.1% from US$12.0 million recorded in 2017.

In 2021, Canada did not export confectionery products to India. In 2020 however, Canada exported $US0.06 million (US$55,048) of confectionery products to India, representing an increase in CAGR of 78.4% from US$0.01 million (US$9,693) in 2017.

Consumer trends

Snacking has become a source of comfort, especially during the pandemic, as Indian consumers, like other consumers, have spent an extended amount of time isolated at home. Euromonitor International reports the accelerated growth in consumer snacking at home in India, has increased by nearly a tenth in 2021 with most consumers driven by buying that invokes good memories, the creation of a peaceful moment in one's day and to reward or feel satisfaction upon consumption.^{Footnote 1} Snacking has also become an antidote for loneliness and an avenue for connection. For connection purposes, activities include making a snack together and eating a snack in celebration of a special occasion.

Global retail sales of confectionery products

India was the thirteenth largest global retail sales market of confectionery products, after Canada and Australia, with values of US$3.3 billion, representing a 1.8% market share in 2021. India experienced the largest CAGR of 6.6% during the historic period of reported global markets, as retail sales increased from US$2.6 billion in 2017, and is expected to achieve the largest CAGR of 7.9% in the forecast period as retail sales increase to US$5.0 billion by 2026. In comparison, Canada was the eleventh largest retail sales market of confectionery products, accounting for a 2.0% retail sale market share with values of US$3.8 billion in 2021.

Retail sales of confectionery products in India

Overall, retail sales of confectionery products in India increased moderately at a CAGR of 6.6% as retail sales grew from US$2.6 billion, 440.4 thousand tonnes in 2017 to US$3.3 billion, 474.1 thousand tonnes in 2021. Chocolate confectionery remains the largest subcategory in 2021 with retail sales valued at US$1.8 billion, (representing a 53.% market share), 128.4 thousand tonnes, despite the marginal growth in CAGR of 1.1% evidenced in volume terms.

During the forecast period of 2022 to 2026, confectionery products are expected to increase in CAGR by 7.9% from US$3.6 billion, 491.9 thousand tonnes in 2022 to US$5.0 billion, 549.1 thousand tonnes in 2026. Chocolate confectionery will remain the largest subcategory with a 57.0% market share and retail sales valued at US$2.8 billion, 156.5 thousand tonnes in 2026.

Competitive landscape

Company shares

The five largest confectionery product companies in India controlled 62.7% of the retail market share in 2021. Mondelez International Inc and Nestlé SA maintained their prominent positions as top companies with a combined market share presence of 42.2% in 2021, with Nestlé SA experiencing the largest CAGR of 3.9% from a 7.9% market share in 2017 increasing to a 9.2 market share % in 2021.

Brand shares

Cadbury Dairy Milk was the largest confectionery product brand in India with retail sales of US$545.6 million in 2021 from US$438.7 million in 2017, representing an increase in CAGR of 5.6%. Cadbury, the second largest brand attained 538.8 million, representing the largest increase in CAGR of 8.6 from retail sales of US$386.9 million in 2017.

Two of the top five brands confectionery brands in India, Cadbury Dairy Milk and Cadbury are owned by Mondelez International Inc and held a combined market share of 14.2% in 2021. The remaining three brands Parle, Kinder and Candyman held a combined market share of 15.5% market share in 2021.

Market Segmentation

Chocolate confectionery

In 2021, according to Euromonitor International, chocolate confectionery sales were supported by consumption for mood management and comfort. Mindfulness and wellbeing were of importance as indulgence, combined with health and wellness, had consumers select trusted and superior quality chocolate confectionery brands such as Cadbury and manufacturers such as Nestlé and Mondelez India Foods for their preferred product of choice.^{Footnote 1}

To further support chocolate consumption and help mitigate the negative association of chocolate with poor diet, healthier dark chocolates and their lower sugar content, in addition to chocolate without artificial sweeteners, colours or preservative variants were introduced to the consumer.^{Footnote 1} In addition, the expansion of international chocolate confectionery brands available to the Indian market could lead to a further increase and change in (category dynamics) of chocolate confectionery products available. Hershey, for example, strengthened its presence in India after announcing the launch of its chocolate bars under its established brand early in 2020. The brand also planned for the nationwide distribution of Hershey Kisses, which have only been available in South India since its launch in 2018.^{Footnote 1}

Chocolate confectionery is the largest confectionery product subsector in India with retail sales valued at US$1.8 billion in 2021, representing a moderate increase of 7.1% in CAGR from retail sales of US$1.3 billion in 2017. The chocolate confectionery subsector is expected to remain the largest segment in the forecast period attaining a CAGR of 9.4% as retail sales are expected to increase to US$2.8 billion in 2026. All segments of chocolate confectionery performed well historically, (with the exception of 'other chocolate confectionery' which experienced no growth or 0.0% in CAGR), and are expected to increase moderately in CAGR ranging from 6.9% to 10.5% in the forecast period.

In value terms, tablets (moulded and segmented chocolate bars in a wide range of sizes ranging from bite-size to family bars-Euromonitor International category definition) were the largest chocolate confectionery product segment in India with retail sales of US$831.8 million in 2021, increasing in a CAGR of 7.8% from retail sales of US$615.1 million in 2017. Countlines (chocolate bars eaten as snacks; many are filled and unsegmented, not pre-cut into smaller pieces/segments-Euromonitor International category definition) were the second largest chocolate confectionery in India with retail sales of US$462.5 million in 2021, representing an increase in CAGR of 5.1% from retail sales of 379.7 million in 2017. The chocolate pouches and bags segment experienced the largest increase in CAGR during both periods, 10.9% as retail sales grew from US$129.2 million in 2017 to US$195.5 million in 2021, and are forecast to attain 10.5% from US$219.7 million in 2022 to US$327.4 million by 2026.

India's top five chocolate confectionery companies dominate the market representing a 83.8% market share in 2021 with Mondelez International Inc occupying the largest market share of 55.9% in 2021, despite a recent decline in CAGR of 0.2% as market share % decreases from 56.4% in 2017.

Mondelez India Foods has benefitted from its strong brand portfolio which includes Cadbury Dairy Milk, Cadbury Dairy Milk Silk, Cadbury Celebrations and Bournville to name a few. The company's success may also be attributed to recent launches of premium chocolate including India's first 'centre' filled' chocolate (Cadbury Dairy Milk Silk Caramello ) and India's first 'aerated' chocolate (Cadbury Dairy Milk Silk Bubbly). Mondelez India Foods have also designed products for special occasions, such as Rakshabandhan, and religious occasions, including Ganpati Puja and Dusshera. In the future, the company plans to launch products across all categories and price brackets, particularly focusing on expanding their rural coverage.^{Footnote 1}

Mars India, another successful company which supplies brands such as Snickers and M&M's,' is hoping to further strengthen their position and category share by developing products specifically targeting local tastes and preferences, such as almond Snickers, for the India consumer.^{Footnote 1}

Sugar confectionery

Globally, sugar is becoming the primary focus of diet and health issues, and rising consumer health-awareness is expected to present a particularly pressing challenge for sugar confectionery products.^{Footnote 2} Sugar confectionery products are facing competition from an expanding range of health-oriented products from other categories as consumers increasingly demand healthier and more nutritious snacking options.

In regards to the Indian consumer, a dominant proportion believe that avoiding sugar makes them feel healthier, however; many also maintain that they try to avoid or limit products containing sugar because they have read, or heard that it is harmful to consume.^{Footnote 2} Manufacturers are responding to this concern by adapting and changing their products to add fruit juice (as natural sugars are perceived as healthier than artificial ones) and fortifying their products with Vitamin C. Perfetti Van Melle recently launched Alpenliebe JuiCyfills, a liquid-filled candy with fruit juice and Vitamin C in its ingredients. Relatedly, reduced sugar products are also an increasing trend. As such, it is expected that fortified and healthier variants will become more popular in the coming years.^{Footnote 2}

To remain relevant and keep consumers interested, manufacturers will also continue to innovate by adding new flavours and formats to encourage sales. Perfetti Van Melle for example, recently launched Center Fresh Clean Breath , its first product classified in the intense mint flavour segment. The company is also seeking to improve available formats by integrating games with their products for children to enjoy. In addition, special occasions such as Valentine's Day, and festivals such as Rakhi, provide further opportunities for sugar confectionery companies and their brands to increase sales throughout the year. Of note, Euromonitor International reports that despite the financial strain incurred by some consumers on account of the pandemic, refraining from gifting chocolate and sugar confectionery on special occasions has not been effected, encouraging manufacturers continued opportunities to tailor their products to suit their consumers' needs and expectations.

Sugar confectionery is the second largest confectionery product subsector in India with retail sales valued at US$1.3 billion in 2021, representing an increase of 6.8% in CAGR from retail sales of US$1.0 billion in 2017. The sugar confectionery subsector is expected to attain a comparable CAGR of 6.6% as retail sales increase to US$1.8 billion in 2026.

All segments of sugar confectionery performed well historically, especially the pastilles, gum, jellies and chews segment which increased in CAGR of 11.4%, while the remaining segments are expected to increase moderately in CAGR's ranging from 5.0% to 10.6% in the forecast period.

In value terms, toffees, caramels and nougat were the largest sugar confectionery product segment in India during both periods, with retail sales of US$663.3 million in 2021, increasing in a CAGR of 6.7% from retail sales of US$511.9 million in 2017, and are expected to reach US$918.4 million by 2026. Boiled sweets (any flavoured candies made from boiled sugar and resulting in hard or soft drops; mints and lollipops are excluded) were the second largest sugar confectionery product segment in India during the historic period with retail sales of US$201.3 million in 2021, while the pastilles, gum, jellies and chews segment are the second largest product segment noted in the forecast period, expected to reach retail sales of US$288.7 million in 2026.

India's top five sugar confectionery companies held a 51.6% market share in 2021 with Parle Products Pvt Ltd occupying the largest market share of 15.9%, followed by ITC Group with a 15.2% market share in 2021.

India's larger companies such as Parle Products, ITC, Mondelez India Foods, and Perfetti Van Melle, have more available resources (including robust distribution systems), and are able to offer the consumer greater value through larger or multipack formats, ensuring their leading positioning in confectionery products supply. Known manufacturer Perfetti Van Melle own brands such as Alpenliebe, and Mentos, which represent both a trusted name and product because of their availability and familiarity to the consumer, which also contribute to increasing the company's category share and positioning.

Gum

According to Euromonitor International, the main consumers of gum confectionery products in India are smokers and school-age children. Further, the consumer purchase of gum is viewed primarily as an impulse and in-person purchase^{Footnote 3} that did not seem to be significantly affected by the imposed remote (from home) classes and work scenarios, or the previous restricted operations of in-store retailing channels and foodservice venues during 2020-2021. Rather, gum retail sales experienced a measureable one year increase in CAGR of 3.7% from US$237.4 million in 2020 to US$246.2 million in 2021, suggesting that the increase in time spent at home during the pandemic, has served to not only maintain, but improve at-home consumption as more consumers shopped online, citing the safety and convenience offered by e-commerce as a channel.

Increased gum consumption is anticipated as consumers are becoming more health conscious, particularly in relation to sugar consumption. As such, there has been a recent increase in the availability of gum products with reduced sugar claims and innovation in functional gum products beneficial to the consumer's oral health care.^{Footnote 3}

Gum is the smallest confectionery product subsector in India with retail sales of US$246.2 million in 2021, representing an increase of 2.8% in CAGR from US$220.6 million in 2017. The gum confectionery subsector is expected to attain a comparable CAGR of 2.9% as retail sales increase to US$286.1 million in 2026. Bubble gum is the larger segment within the gum confectionery category with retail sales of US$143.0 million in 2021, an increase in CAGR of 2.2% from US$131.1 million in 2017, despite chewing gum's larger CAGR of 3.6% as retail sales increased from US$89.5 million to U$103.2 million during the same period.

India's top gum (confectionery) companies held an 80.5% market share in 2021 with Perfetti Van Melle Group occupying the largest market share of 69.2%, followed by Mars Inc with an 8.1% market share in 2021. Perfetti Van Melle Group was India's leading gum company in 2021, due in part, to its strong portfolio of brands which included Center Fruit, Center Fresh, Big Babol, and Happydent, and its investment in marketing activities supported by TV, social media and cinema.

Companies such as Perfetti Van Melle have maintained their market share by adapting their operations (supply volume) to accommodate their market environment. In particular, India's retail market environment represents a vast, geographically and socially diverse country which presents significant obstacles and challenges for companies looking to develop a nationwide presence. Companies like Perfetti Van Melle, in order to maximize their category performance and earnings, have had to develop and implement plans to increase their sales by optimizing and leveraging their unit pricing per pack, amidst its broader confectionery offerings to encourage retailers to stock their products, (while maintaining a profit) in order to improve the companies in-store and nationwide presence^{Footnote 3}

Retail distribution channels

Confectionery product sector (off-trade)

The majority of India's confectionery products are distributed through store-based retailing versus non-store retailing during the historic period, specifically 97.1% (store-based) and 2.9% (non-store based) in 2021. Grocery retailers distribute most of the confectionery products in India representing a market share of 93.9% while the remainder of the confectionery products are distributed through non-grocery specialists, 3.2% and non-store retailing (e-commerce), 2.9% in 2021.

Traditional grocery retailers as a sub-outlet type of grocery retailers represent the largest distribution channel for confectionery products representing a 81.3% market share in 2021. Of those traditional grocery retailers, independent small grocers represent the largest (71.3% market share) in 2021, representing a slight decline in CAGR from a 84.9 market share % in 2017. Conversely, non-store retailing (e-commerce) represents the remaining 2.9 market share % in 2021, and of note, experienced the largest increase in CAGR (30.5%) as e-commerce grew from a market share of 1.0% held in 2017 to 2.9% in 2021.

The presence and prevalence of the covid-19 pandemic has recently altered the traditional distribution channels of confectionery products in India towards e-commerce. As many consumers have learned to appreciate the safety and convenience of shopping online and are not likely to modify their shopping behaviors too much in the future, manufacturers have responded and altered their distribution strategy to increase their direct engagement with the consumer.^{Footnote 1} For example, Mondelez India Foods has partnered with Near.Store - a hyperlocal e-commerce platform allowing direct orders for various brands, which are then delivered to the customer's doorstep within 24-36 hours. However, despite the recent prominence of e-commerce as a distribution channel in India, kirana stores (local grocery shops) maintain their relevance and share as a channel due to their convenience and locality, as most consumers are unwilling to venture too far from home for their grocery shopping.^{Footnote 1}

Of note, improving distribution within store-based retail channels and strengthening suitable infrastructure strategies remains a priority for manufacturers who wish to develop their growth in the market. As referenced in Euromonitor International, the provision of branded refrigerators and coolers to retail outlets in rural areas who lacked chilled storage and display equipment, assisted manufacturers in ensuring rural consumers could access their products to maintain and improve sales.^{Footnote 1}

Product trend analysis

Chocolate confectionery in India

According to Mintel, India's chocolate consumers show a preference for local inspired innovation products. In response, chocolate confectionery brands have adapted localism, formulating locally sourced ingredients and regional flavours, celebrating local chocolate-making traditions. Further, Mintel reports that 36% of Indian consumers are influenced in their choice of brand if its tailored to local tastes and/or flavours.^{Footnote 4} Additionally, the Indian consumers' taste for chocolate is evolving as chocolate plays a more valued role as a comforting reward during times of stress.^{Footnote 4}

Nut-flavoured chocolate launches have also flourished in India. In particular, almond, hazelnut and peanut flavours are prolific, while traditional flavours such as caramel and nougat are also popular.

Sugar and gum confectionery in India

Mintel considers APAC (Asia-Pacific) members, Vietnam and India, as opportunity markets with strong value growth potential.^{Footnote 5} In particular, opportunities for traditional breath-freshening flavours in India are developing as manufacturers are positioning sugar confectionery as mukhwas (an after-meal mouth freshener) for after-meal consumption by combining digestive and mouth-freshening functions. The ingredients used, cardamom, clove, cinnamon, fennel, anise seeds and sesame seeds, form part of the traditional Indian mukhwas that aid in digestion.^{Footnote 6}

Product launch analysis

According to Mintel's Global New Products Database (GNPD), there were 2,881 new confectionery products launched in India between January 2017 and December 2021. The number of yearly product launches has declined in growth by a CAGR of 10.9% from the largest launch of 660 confectionery products in 2017 to its lowest, and most recent launch of 416 confectionery products in 2021.

Chocolate tablets, toffees, caramels and nougat and other sugar confectionery were the top sub-categories of newly released confectionery product launches while vegetarian, social media and premium were top claims associated with new confectionery products released during the prescribed period.

Flexible, carton and flexible stand-up pouch package types released in new packaging, new product and new variety/range extension launch types were predominant product attributes of new confectionery products released between January 2017 and December 2021 .

Unflavoured/plain, orange/sweet orange and peanut/groundnut were top flavours (including blends), while white sugar, emulsifiers and glucose syrup were top ingredients identified during this period.

Examples of new products

Opportunities for Canada

The confectionery product market in India is a measurable and expansive sector. In 2021, India was the fifty-eighth largest global market for confectionery products with imports valued at US$107.9 million and 42.6 million kilograms, representing a moderate increase in CAGR of 5.7% as imports increased from US$86.5 million in 2017, while volume of confectionery product imports increased by a CAGR of 15.4% from 2017.

In 2021, Canada did not export confectionery products to India. In 2020 however, Canada supplied India with $US0.06 million (US$55,048) of confectionery products, representing an increase in CAGR of 78.4% from US$0.01 million (US$9,693) in 2017.

India was the thirteenth largest global retail sales market for confectionery products, after Canada and Australia, with values of US$3.3 billion, representing a 1.8% market share in 2021. India experienced the largest historic CAGR of 6.6% as retail sales increased from US$2.6 billion in 2017, and is expected to achieve the largest CAGR of 7.9% in the forecast periods as retail sales increase to US$5.0 billion in 2026. Chocolate confectionery remains the largest confectionery product subsector in India with retail sales of US$1.8 billion (53.0% market share) in 2021, representing a moderate increase of 7.1% in CAGR from US$1.3 billion in 2017. The chocolate confectionery subsector is expected to remain the largest segment in the forecast period attaining a CAGR of 9.4% as retail sales increase to US$2.8 billion in 2026

The Indian confectionery market is evolving with changes in consumer perception and preferences for healthier and indulgent options increasing. Given the expected and continued growth in the confectionery product market in India, Canadian producers have an opportunity to expand their exports and products within the Indian confection sector. That said, it is important for Canadian suppliers to work closely with their importing partners and Trade Commissioners to understand and ensure that India's import requirements and duties for their specific products are met. It is also important to note and appreciate the value of commitment, and market development efforts needed to further access the Indian market in relation to competitors who may yield a price competitiveness and freight advantage due to their proximity to India.

For more information

The Canadian Trade Commissioner Service:

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

• Find a Trade Commissioner

More agri-food market intelligence:

International agri-food market intelligence
Discover global agriculture and food opportunities, the complete library of Global Analysis reports, market trends and forecasts, and information on Canada's free trade agreements.

Agri-food market intelligence service
Canadian agri-food and seafood businesses can take advantage of a customized service of reports and analysis, and join our email subscription service to have the latest reports delivered directly to their inbox.

More on Canada's agriculture and agri-food sectors:

Canada's agriculture sectors
Information on the agriculture industry by sector. Data on international markets. Initiatives to support awareness of the industry in Canada. How the department engages with the industry.

For additional information on the AAHAR Food & Hospitality Food Show, please contact:

Nitin Verma [he / him]
Counsellor (Agriculture and Food) and Trade Commissioner
High Commission of Canada
Government of Canada
CanadainIndia.Agri@international.gc.ca

Resources

• Euromonitor International, Country Report: Chocolate Confectionery in India. July 2021
• Euromonitor International, Country Report: Gum in India. July 2021
• Euromonitor International, Country Report: Sugar Confectionery in India. July 2021
• Global Trade Tracker, 2022
• Mintel Global New Products Database, 2022
• Mintel, A year of innovation in chocolate confectionery, 2022
• Mintel, A year of innovation in sugar and gum confectionery, 2021

Sector Trend Analysis – Confectionery products in India
Global Analysis Report

Prepared by: Laurie Bernardi, International Market Research Analyst

© Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2022).

Photo credits
All photographs reproduced in this publication are used by permission of the rights holders.
All images, unless otherwise noted, are copyright Her Majesty the Queen in Right of Canada.

To join our distribution list or to suggest additional report topics or markets, please contact:

Agriculture and Agri-Food Canada, Global Analysis
1341 Baseline Rd, Tower 5, 3rd floor
Ottawa ON  K1A 0C5
Canada
Email: aafc.mas-sam.aac@agr.gc.ca

The Government of Canada has prepared this report based on primary and secondary sources of information. Although every effort has been made to ensure that the information is accurate, Agriculture and Agri-Food Canada (AAFC) assumes no liability for any actions taken based on the information contained herein.

Reproduction or redistribution of this document, in whole or in part, must include acknowledgement of agriculture and agri-food Canada as the owner of the copyright in the document, through a reference citing AAFC, the title of the document and the year. Where the reproduction or redistribution includes data from this document, it must also include an acknowledgement of the specific data source(s), as noted in this document.

Agriculture and Agri-Food Canada provides this document and other report services to agriculture and food industry clients free of charge.