Global snack players compete for piece of Indian market

Nov 16, 2018
Targeting huge shares of Indian market, global confectionary giants are lining up in India to secure bigger proportion of businesses.
A race of multinational companies to acquire apex position, are struggling to keep up the pace. U.S. Company Hershey has launched its iconic Kisses chocolates recently, while South Korea’s Lotte Confectionery has acquired Havmor Ice cream in the country.
Kameda Seika of Japan has marketed Indian versions of its best-selling rice crackers. With prevailing condition of the consumer market and severe competition, many MNC and Indian makers are considering mergers and acquisitions.
Hershey entered the Indian market through a joint venture with Godrej Group, and later acquired its partner’s stake. “At Hershey, our international business is key to our overall success, and India is a critical part of that success,”  CEO Michele Buck announced at the launch of Hershey’s Kisses.
Milk Chocolate, Cookies ‘n’ Creme and Almonds are the 3 varieties of the bite-sized chocolate drops available for Indian consumers — The Milk Chocolate is at Rs.50 for a 36 gram pack and Rs.140 for the 108 gram pack.
The product first goes on sale in southern India, where chocolate consumption is larger, and the company plans to expand to other areas gradually.
Operating its manufacturing plant in the central state of Madhya Pradesh, Hershey has been selling chocolate syrup, cocoa powder, beverages like milk shakes and the Brookside brand of chocolate products in India.
According to the market survey and data analysis, annual chocolate sales in India stand stands at $1.2 billion wherein the market is dominated by Mondelez International, the U.S. confectionery company best known for Oreo cookies, which has a share of over 60%.
Hershey remains undaunted, as India “offers significant growth opportunities given its demographic and economic potential and the expected consumption growth rates in the years ahead,” according to Buck.
At the augment of its footprint in India in 2004, Lotte has steadily expanded its lineup, which now ranges from candies and gum to chocolate pies. In 2017, Lotte Confectionery bought the Gujarat-based Havmor Ice Cream for 10.2 billion rupees ($139 million). Along with Havmor, operates a network of ice cream parlors including the Baskin-Robbins chain.
In 2017, Japanese player Kameda Seika introduced its popular Kaki-no-Tane rice crackers through a local joint venture, rebranding it as Kari Kari and giving them slightly modified touch of flavors to suit Indian tastes. They come in two sizes — a 70 gram pack for Rs. 50 and a 150 gram pack at Rs. 99.
Currently, Kari Kari is available in supermarkets of New Delhi, Mumbai and Bangalore, but Kameda will soon plan to expand to other parts of the country.
After the U.S., Thailand, Vietnam and China, India proves to be Kameda’s fifth overseas market. Rice crackers are rich in proteins and carbohydrates with low fat and calories than most snacks. Kameda is ready to roll its products as a healthier alternative to cookies.
“Demand for healthy confectionery is also growing in India”, opined Chairman and CEO Michiyasu Tanaka.
Along with ice cream market, sales of confectioneries in India grew by 13%  to $14.4 billion in 2017. The market is on track to grow at a double-digit rate again in 2018, as it has for the past several years.
Indian confectionery makers are developing more competitive products and expanding capacity as they face growing competition from foreign companies wherein some domestic players are also exploring potential tie-ups and acquisitions.

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