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Value-added or functional confectionery is emerging trend
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Saturday, 16 June, 2012, 08 : 00 AM [IST]
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Our Bureau, Mumbai
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fiogf49gjkf0d Introduction
The big ten in the Indian confectionery industry, currently estimated to be worth over Rs 1,400 crore and growing at about nine per cent per annum, are as follows:
● Cadbury India Ltd
● Perfetti Van Melle Ltd
● Nestle India Ltd
● Lotte India Ltd
● Nutrine Confectionery Co Ltd
● Candico India Ltd
● Parle Products Pvt. Ltd
● Wrigley India Pvt. Ltd
● ITC Foods
● Hindustan Unilever Ltd
Apart from these, there are renowned candy-makers such as the Maharashtra-based Ravalgaon (officially called The Ravalgaon Sugar Farm Ltd) and the Karnataka-based Central Arecanut and Cocoa Marketing and Processing Co-operative Ltd (CAMPCO).
Sugar confectionery accounts for approximately 70 per cent of the domestic market, and chocolate confectionery is the remainder.
Current trends
Over the decades, confectionery products – which include chocolates, hard-boiled candy, toffees, and in the broader Indian context, an array of mithai, were considered an occasional treat. Kids love them, but are warned against eating too much of them, because of the association with tooth decay and visits to the dentist.
An official of the Indian Confectionery Manufacturers' Association told F&B News that the biggest challenge the industry is facing currently is the skyrocketing price of sugar, the main raw material required to prepare any kind of confectionery.
One of the concerns often raised by healthcare professionals is the increasing consumption of artificial sweeteners, an ingredient in many confectionery products.
Future trends
The industry assessment of the current trends itself contains the trends likely to emerge in the coming years.
“Kids will remain our main target consumers, but of late, adults have also entered the fray. India has been, and will always remain, a huge market for confectionery players, because Indians have a sweet tooth,” said the aforementioned Indian Confectionery Manufacturers' Association official. His statement was echoed by others in the industry as well.
With awareness about lifestyle-related diseases such as obesity and diabetes increasing, sugar is now being replaced by natural sweeteners.
Most confectioners, and even reputed mithai makers, have begun to offer healthier options to the consumers, which, in the long run, could be good from an industry perspective as well. These are referred to be industry insiders, such as Pravin Kulkarni, general manager, Parle Products Pvt Ltd, as value-added confectionery. “From an Indian point of view, it is an upcoming trend, but it is definitely a good one,” he told F&B News via telephone.
'Ambiguous licensing, registration rules'
B K Gurbani, chairman, Gurbani Group, refuses to believe that the entry of foreign brands into the Indian market is a threat.
“The competition is actually good, be it from companies that import directly or those that acquire existing players in the Indian confectionery space. It will open several new doors in the market, and we will see many new products in stores.”
However, he does perceive the chapters pertaining to licensing and registration in the Food Safety and Standards Act (FSSA), 2006, as ambiguous.
Challenges
“Firstly, our margins aren't very high. But we are trying to increase them to an extent by upgrading the prices of the products,” Gurbani said.
“Secondly, the prices of packaging materials have increased,” he said, adding that this has had an adverse impact on the confectionery industry. “But it can be overcome. In fact, a number of new packaging materials are now available in the market. These are cost-effective and innovative.”
“Advertising and merchandising perhaps has to play a bigger role now than it has ever played in the past. That is because we are all witnessing a drastic slump in the per capita consumption,” Gurbani said.
'Legal metrology rules don't apply'
Kulkarni said, “Confectionery won't be affected by the rule. The relaxation in the law [which stipulates that all packed food manufacturers now have to conform to a specified set of weights by November 1, 2012 (a four-month extension of the original deadline)] is a step in the right direction.”
“We are quite happy with the concession. In fact, the contents of packs priced under Rs 10 are not bound by the weight clause. However, it becomes applicable when a manufacturer wants to sell a packed edible above Rs 10,” he added.
Projections
Over the next three years, it is estimated that the Indian confectionery industry, whose compound annual growth rate (CAGR) has been steady at about 12 per cent, could witness a slightII
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