Indians get sweet on chocolates

After a disastrous start in the early 70s,cocoa is back in India and prospering,thanks to the growing penchant for chocolates.

Written by RajeshRavi | Published:July 11, 2012 1:19 am

After a disastrous start in the early 70s,cocoa is back in India and prospering,thanks to the growing penchant for chocolates. The Indian chocolate market is seen growing at a compounded annual growth rate of 15-20%. However,the per capita consumption of chocolates is still a paltry 100-150 gram compared to 11 kg consumed by Ireland,which is considered to be the highest.

Interestingly,India’s per capita consumption of chocolate has doubled in the last five years. India has always had a sweet tooth,and chocolate is fast becoming its favorite treat.

“Indians now prefer chocolates over other Indian sweets because of health considerations. This has also helped in opening the bakery segment to the chocolate manufacturers. We have bakery chains which have launched their own brands of chocolates as an offering either sold as packs or even as bulk by weight,” Sarin Patrick,director of Cacobean Chocolatier,a gourmet chocolate manufacturer,told FE.

“Private labeling of chocolates for various clients is seen increasing rapidly as the economy grows. Hospitality is another segment that is growing at a consistent rate. Chocolates in the corporate gifting segment is the new trend,with variety of gift-packaging and customisation in branding. Chocolates have become a premium gifting option,” Sarin Patrick said. The Indian chocolate market is thought to be worth some R1,500 crore and has been hailed as offering great potential for Western chocolate manufacturers as the market is still in its early stages. Over 70% of chocolate consumption takes place in the urban areas. Chocolate consumption in the rural areas is negligible in India.

Indian imports more than half of its requirement of cocoa every year,with the demand increasing at a healthy rate of 8% per annum. PJ Chackochan,chairman of Indian Organic Farmers Producer Company,said cocoa farming has good market in India. “The requirement of cocoa is increasing and we are trying to increase the productivity through our farmers to meet the requirements,” he said. The demand for cocoa is a derived demand. It depends on the ‘extent of market’ for cocoa-based products like chocolates,beverages and biscuits.

According to Kochi-based Directorate of Cashew and Cocoa Development (DACCD),the total area under cocoa is 63,015 hectares (ha),with a total production of 12,900 tonne. Cocoa is mainly grown in Karnataka,Andhra Pradesh,Kerala and Tamil Nadu.

“Growth of the domestic market in India has helped us concentrate more on promotion of cocoa. The cocoa crop and chocolate industry has good future in India,” Venkatesh N Hubballi,director of DACCD,said. The directorate has a long-term plan to bring in additional 50,000 ha by 2016-17,keeping in view the increasing demand.

Kerala farmers had a bad tryst with cocoa in the 80s when prices fell sharply,as the sole buyer withdrew from the market. Many farmers deserted cocoa farming after this. In Kerala,the area under cocoa expanded from 1,823 ha in 1970-71 to 23,506 ha in 1980-81. In 1982-83,it declined to 18,234 ha.

“Perception on cocoa farming has entirely changed in the past few years. Cocoa is now being promoted as inter-crop unlike earlier when it was sold as a mono-crop,” Venkatesh said.

This reduces the risk for farmers even in times of falling prices,he said. The low productivity of cocoa also adds to the advantage of using it as an inter-crop. Cocoa production is likely to get a boost with the government doubling the subsidy provided for replanting. Indian productivity is lower by 40-50% compared to the global standards,which is close to 1,000 kg per hectare,Venkatesh said. Focus of the cocoa crop expansion programme will be Andhra Pradesh,Tamil Nadu and Karnataka,with the directorate spending R77 crore under the 11th Plan. Andhra Pradesh,Tamil Nadu and Karnataka have around 3,00,000 hectare under irrigated coconut plantations,which can be exploited to provide additional income for farmers,he said.

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