Although small, India is one of the fastest growing markets for chocolate confectionery, with plenty of room for growth, according to Barry Callebaut.
According to Nielsen, sales volume of chocolate confectionery in India grew 16% in 2018, a 6.5% CAGR from 2013 to 2018. Euromonitor expects strong continued growth in the next five years.
The average chocolate consumption per capita in India is 100g to 200g per person. That is a stark contrast to Japan, Asia’s biggest chocolate consumer at 2kg per person, and between 5kg to 9kg per person in Europe.
The firm aims to capitalise on this trend, with the building of one of its largest chocolate and compound manufacturing facilities in Baramati, India, to increase consumption of chocolate in the country.
Consumer trends
According to Dhruva Jyoti Sanyal, managing director of Barry Callebaut India: “Chocolate consumption in India is growing across all different formats.”
“We are seeing people travelling abroad and bringing chocolate back. That is also helping change the perception of chocolate in the country.”
Sanyal told FoodNavigator-Asia that India is still predominately a milk chocolate market.
“Most Indians grow up having Cadbury Milk Chocolates. So that is the taste that they are familiar with.”
However, he sees a growing trend in premium as well as dark chocolate as people pay more attention to health and sugar reduction now.
Ben de Schryver, Barry Callebaut president of Asia Pacific said: “It’s about having a nice indulgent product, that’s healthier as well.”
He added that India is still a relatively price sensitive market. While Indian consumers love chocolate, they have become pickier. This means they are more willing to pay more for better quality chocolate.
Sanyal said there is also a growing trend in gifting chocolate in India.
With these trends in mind, Barry Callebaut will cater for both low-end and premium chocolate products.
The chocolate factory
Their 20,000 m2 chocolate factory and warehouse is scheduled to begin operations in mid-2020, and produce more than 30,000 tons of chocolate and compounds annually.
It will be equipped with an R&D lab to co-create innovative chocolates for local consumers, and manufacture chocolate and compounds in different delivery formats such as biscuits, ice cream, chips, and cakes.
The factory will produce three types of chocolate, milk, white, dark, as well as their compounds.
Barry Callebaut’s famous creation ruby chocolate will not be produced in this facility.
Innovation in India
“India is an exciting market where innovation in chocolate is well received by consumers. We have experienced double-digit growth in India over the last three years,” Sanyal said.
de Schryver added, “Asia Pacific make up 5% of the company’s global volume. Last year in Asia Pacific, we produced more than 60,000 tons of chocolate.”
With the new factory, “India will become an important cornerstone to our business in Asia Pacific.”
de Schryver explained the need for an R&D lab at the new factory, saying: “It is important to have the lab in India. We cannot do it centrally from Europe or Singapore because each country is specific, with local flavours and local needs. Having the lab in India brings us closer to our customers.”
de Schryver also said they are working extensively on improving the heat stability of their products. In countries like India, distributing chocolate is a tedious process that requires a comprehensive cold chain, from refrigerated trucks to display cases to maintain temper.
Future plans
The company already operates nine other chocolate and cocoa factories in Asia, namely in China, Indonesia, Japan, Malaysia, and Singapore.
de Schryver said: “The second chocolate factory in Indonesia is currently being built in Rancaekek, near Bandung, and will be completed at the end of this summer.”
On plans to expand elsewhere in South East Asia, “We will assess each country differently as there are specific needs and demands.”
He quoted the example of India, where they started with a sales office and academy centre in 2007, before demand grew and they built a factory.
As of now, the new factory represents Barry Callebaut’s biggest investment in India yet.