In India, love affair with chocolates continues

Chocolate majors in India posted healthy top-line growth in FY19. While Mondelez India Foods - the marketer of Cadbury - continued to lead the pack, Nestle India, which dominates the confectionery space with leading brands like Kitkat and Munch, continues to hold the third spot in revenue.

Buoyed by the sweet tooth of Indian consumers, leading chocolate makers - Mondelez, Ferrero, Mars and Hershey - have registered healthy sales growth in 2018-19.

However, two of these companies - Mars International India and Hershey India - still remain in the red.

Mondelez India Foods - the marketer of Cadbury - continued to lead the pack with Rs 6,746 crore revenue.

According to filings at the Registrar of Companies, its top line grew 9 per cent year-on-year (YoY) from Rs 6,189 crore.

The firm’s net profit, during 2018-19, jumped 42 per cent to Rs 462 crore from Rs 325 crore.

Italian chocolate maker Ferrero, which markets Ferrero Rocher and spreads like Nutella, witnessed 13 per cent rise in its revenue at Rs 1,473 crore.

After incurring losses in 2017-18, the firm turned profitable last year with a net profit of Rs 106 crore.

However, the other two major players - Mars International and Hershey - continued to bleed with losses mounting further.

While Mars posted Rs 246 crore net loss, Hershey India’s net loss widened to Rs 109 crore in 2018-19.

In the previous financial year, the two firm’s had reported Rs 195 crore and Rs 85 crore net loss, respectively.

In fact, Hershey has been in loss at least since 2014-15, although its bottom line improved with yearly loss coming down from a peak of Rs 365 crore five years ago.

Mars, however, registered the biggest jump among the four, when it comes to increasing sales.

The firm’s revenue rose 34.5 per cent YoY to Rs 1,009 crore from Rs 750 crore.

Its sales numbers, however, include non-confectionery products under pet care brands like Pedigree, Whiskas and Royal Canin.

In its regulatory filings, Mars said it witnessed “robust growth in the pet nutrition segment at 20 per cent”.

The company added, “The fast-paced growth of the pet food category in e-commerce is contributing to the business growth story with our e-commerce business growing at over 60 per cent YoY.”

It further said that Mars is the leader in the pet care industry of the country and holds over 50 per cent share.

Hershey, the smallest in the pack, reported a 16 per cent rise in revenue to Rs 375 crore from Rs 324 crore in 2017-18.

Now, with a range of cookies under Sofit, a label Hershey acquired from Godrej, Hershey is hoping for a bigger share of the consumers’ wallet and a way back into the black.

It is also looking at a more aggressive play in the chocolates market, having introduced its iconic tear-drop shaped Kisses brand in the country last year.

Nestle India, which dominates the confectionery space with leading brands like Kitkat and Munch, continues to hold the third spot in revenue.

The firm, which follows the calendar year format, raked in Rs 1,400 crore in sales from the category in 2018 with 15 per cent YoY growth.

While all major brands managed to grow their top line by a healthy margin, it is the steep competition among players that dented the performance of Mars and Hershey, said industry sources.

Estimates suggest that the Rs 15,400-crore local confectionery market is growing at 10 per cent compound annual growth rate.