An Overview of Pakistan Chocolate & Confectionery Market (Branded Segment)


This article is an upgraded version of my earlier articles on the subject especially as far as statistics are concerned as I have received many requests to update data. Appreciate your enormous support and encouragement, here it comes….enjoy and don’t forget to share your feedback

Market Dynamics & General Business Environment

  • Market dominates by domestically produced brands nonetheless foreign brands are becoming increasingly popular especially among urban middle and upper class consumers.
  • Swiss and Belgium chocolates are popular in the upscale niche market segment and available at high-end LMTs and IMTs. Besides distributors selected LMTs and Wholesalers also import foreign brands.
  • Imported products in general are considered to be of higher quality than the domestic ones , hence trade do charge relatively a higher margin and give it a prominent display . Consumers are also willing to pay higher price for known brands of good quality.
  • Market is generally price sensitive. The distinction lies between the larger mass market that is highly price-elastic and the high-end niche market, where despite important, price is secondary to quality and brand image.
  • Organized distribution setups are monopolistic in nature though capable of meeting international standards of warehousing, logistics and stock management facilities with national foot-print in the market via direct presence in all major cities ( with proper office setup and dedicated front & back-end support staff ). However a large no. of small towns are normally managed through sub-distributors called SDs where control of primary distributors are limited.
  • Trade channel comprises of a large number of intermediaries ( Stockiest , W/S, Retail , LMTs , IMTs and GT) with insufficient storage and refrigeration facilities especially in B class general trade (GT) . Though Cadbury has overcome this issue by providing specially designed low-cost , energy-efficient chillers. Normally chocolates are kept in such chillers or refrigerated coolers in summer.
  • The organized sector is gaining ground with the emergence of supermarkets and hypermarkets in metropolitan cities of Pakistan.
  • Cold chain facilities are available with renowned distributors from port to retail outlet level . Services can be provided for food & pharmaceutical products (2-8◦C). Temperature monitoring devices with data loggers recording with round-the-clock data to ensure uninterrupted storage & distribution activity at a given temperature are available.
  • Though such arrangements make the cost of distribution high and therefore distributor charge a relatively high margins depending upon the worth and ROI of business.
  • The import tariffs for confectionery products vary from 30% to 45% . GST for registered trade varies from 15-17%.
  • Traditional targets for confectionery products are children, however growth opportunities exist in targeting the youth & adult consumer segment ( Cadbury’s Dairy Milk is a good success story) .
  • Pakistan has a large retail base though highly fragmented and dominated by small retailers, competing in terms of Location , personal relationships and product ranges etc.. But a major shift has been observed with the opening of a growing number of large retail chains especially in the major cities where higher concentration of middle and upper-income class exist.
  • Growth in the urban middle class and increase in personal disposable income in tier 1 cities have slowly but steadily improved the consumption pattern and welcome the influx of branded non-essential items and luxury goods such as high-end premium chocolates , fast-food chains and leisurely soft goods..Calculation for imported products:
    • CNF in US$ (1)
    • CNF converted in PKR (2)
    • 1% insurance of CNF 3 (= 1% of 2)
    • CNF + insurance 4 = (2+3)
    • Import value 5 = ( 1% of 4)
    • Value for custom duty ( only for valuation purpose) 6 = ( 4+5)
    • FED 1 % , 7 ( = 1% of 6)
    • Custom duty 8 = (30-35)% of 6
    • Regulatory Duty 9 = ( 0% of 6)
    • Duty paid Value 10 = 6+7+8+9
    • 10 + WHT if applicable + Clearing Charges = Total landed cost
    • Estimated Market Size Pakistan Branded Confectionery 2014 :
  • Value Matrix Local Major Competing Brand Pakistan-2014
    Company / Brands Major Product Lines Est. Annual Est. Mkt.
    Sales Bil. PKR Share
    Hilal Bubble, Candy, Jellies, Chocolate beans, Powder drinks 14 27%
    Supari
    Candyland Jellies, Candy, Chocolates, Lollypops, Biscuits & Snacks 13 25%
    Cadbury Chocolates, Toffees, Candies, Mint Chewable Candies 8 15%
    Volka Foods Jellies, Bubble Gum, Candies, Chocolates, Biscuits 8 15%
    JOJO Bubble Gum, Candies & Toffees 4 8%
    B.P Sweets Jellies, Candies, Toffees, 1.2 2%
    Mayfair Bubble Gum, Deposit Candies, Candies, Chews, Biscuits 1.5 3%
    Mitchell’s Toffees, Chocolates, Moulded Chocolates 0.75 1%
    Danpak Bubble Gum, Chocolates, Candies and Sweets 1 2%
    Sweethills Candies, Toffees, Bubble Gum 0.75 1%
    Total Domestic 52.2 100%
    Major Imported Brands
    Mars Mars, Galaxy, Bounty, Snickers etc. 1 26%
    Ferrero Ferrero, Nutella, Tic Tack 0.75 20%
    Nestle Kitkat, Polo, Assorted Sweets, Chocolates 0.75 20%
    Perfetti Van Melle 0.3 8%
    Others 1 26%
    Total Imported 3.8 100%
    Grand Total (Estimated) 56

“Market potential abounds, but so do challenges”


“Market potential abounds, but so do challenges”
Pakistan, India and U.A.E. demographics favor confectionery growth, yet each has its own distinct operating environment.

my new article published in the U.S. as their main magazine feature under captioned ” Market Potential abounds, but so do Challenges ” International snapshot The CandyIndustry Oct 2013 issue page 40-42,  Please share your comments.

http://digital.bnpmedia.com/publication/?i=177290

http://lnkd.in/bJR3xde

Market potential abounds, but so do challenges
Pakistan, India and U.A.E. demographics favor confectionery growth, yet each has its own distinct operating environment

2012 in review


The WordPress.com stats helper monkeys prepared a 2012 annual report for this blog.

Here’s an excerpt:

4,329 films were submitted to the 2012 Cannes Film Festival. This blog had 14,000 views in 2012. If each view were a film, this blog would power 3 Film Festivals

Click here to see the complete report.

Hershey creates sweet connection between students in U.S., Ghana


Hershey creates sweet connection between students in U.S., Ghana

The days when school children handwrote a letter to a peer on the other side of the world sure have evolved.

Hershey has recently launched a modern version of a pen pal program that links kids at a school in its hometown of Hershey, Pa. to children in Ghana. But instead of handwritten letters, the students connect through real-time, high-definition technology that creates a common, virtual classroom.

While the two places may have very different cultures, they share a common bond that will no doubt help the students understand each other — Hershey is the largest U.S. chocolate maker, while Ghana is a world leader in cocoa production.

The Hershey Learn to Grow: Ghana Distance Learning Program allows about 80 elementary students to learn together based on a curriculum developed by teachers in Hershey and Ghana.

It’s the first-of-its-kind and was developed in collaboration with the Milton Hershey School, the M.S. Hershey Foundation and Hershey Story Museum, Cisco, as well as African partners that include the Assin Fosu school, Ghana Education Service, Ghana Cocoa Board and Source Trust.

“We are thrilled by how well our students have responded to this new way of learning about Ghana and seeing links between cocoa growing and chocolate making,” says Joel Crowley, fourth grade teacher at the Milton Hershey School. “Everyone in Hershey has been inspired by the passion the children and teachers in Ghana have for learning together through this powerful technology.”

Meanwhile, Eric Gyeke, headmaster of the FOSCO Demonstration School in Ghana, says the children in their classroom are delighted by the relationships they’re forming with the students at the Milton Hershey School

“In Ghana, we are focused on bringing the highest quality education to our rural schools and believe this technology-based programming is a major step forward,” he explains.

The connection is made possible by high-definition telepresence video technology from Cisco.

During each session, 11- and 12-year-old students in Assin Fosu, Ghana — a rural town in the Central Region — participate in a life-like virtual classroom program with fourth-grade students at the Milton Hershey School (MHS) in Hershey, Pa.

The MHS students connect to Ghana from The Hershey Story Museum’s Chocolate Lab located in downtown Hershey, Pa. Teachers from both schools, in addition to educators from the museum, lead the sessions together, following the same curriculum and lesson plans.

Based on the early success of the Hershey’s Learn to Grow: Ghana Distance Learning program, the partners have decided to extend the program — originally slated for 10 modules over two months — through the full academic year and explore opportunities to further expand the program.

“At Milton Hershey School, we try to emphasize to our students that they are a very important part of a bigger community, and this program takes it one step further,” says Anthony Colistra, MHS president.

Students from both countries connect every two weeks and go through six structured lesson plans over the course of three months. They look at factors that impact daily life in each country — from climate and weather to understanding local geography — and also learn about how cocoa connects their respective local economies.

The Ghanaian students will share information about cocoa farming and learn how cocoa, the key ingredient to chocolate, is grown and where it originates.

Meanwhile, the U.S. students and teachers, will share information about how the cocoa grown in Ghana becomes delicious chocolate products.

And of course, the students in Ghana will get to taste chocolate bars made in Hershey, Pa., with many trying chocolate for the first time.

Each of the distance learning sessions incorporates a cultural exchange activity, an interactive lesson which ties into the curriculum and a “Q&A” session between the students.

This distance learning program is part of The Hershey Co.’s multiple initiatives to reinforce cocoa sustainability and accelerate farmer and family development in West Africa, where 70% of the world’s cocoa is grown.

Hershey also recently committed to having third-party certification for 100% of the cocoa it uses for all of its chocolate products by 2020.

For more information about Hershey’s cocoa sustainability programs in West Africa, visit: http://www.hersheycocoasustainability.com.
Courtesy By : The CandyIndustry

Global (Premium and Regular) Chocolates in Pakistan – A Price Survey Dec 2011


Premium Chocolate Price Survey Dec 2011 ssd1

Premium Chocolates
Shelf Counter
Premium Chocolate Price Survey Dec 2011 ssd1
Premium Chocolates Brands in Pakistan
Global (Premium and Regular) Chocolates in Pakistan – A Price Survey Dec 2011

Prices in Pakistan are not controlled especially in imported items being imported through gray channels, hence it varies from time to time and shops to shops.

Here is a Chart of Market Prices ( dates back to Dec 2011)

Retailer’s margin falls within the range of 25-30%

2011 in review


The WordPress.com stats helper monkeys prepared a 2011 annual report for this blog.

Here’s an excerpt:

The concert hall at the Syndey Opera House holds 2,700 people. This blog was viewed about 11,000 times in 2011. If it were a concert at Sydney Opera House, it would take about 4 sold-out performances for that many people to see it.

Click here to see the complete report.

my second article published in The Candy Industry- A U.S. based global confectionery magazine, November 2011 issue page 20-22.


Dear All,
Below is the link of my second article published in The Candy Industry- A U.S. based global confectionery magazine, November 2011 issue page 20-22.
One major underlying objective is to promote the image of Pakistan and its confectionery industry among foreign readers and professionals.
Title of article: Pakistan’s First Ladies of Chocolates-An article based on Lals Chocolates , an enterprise being run by Pakistani Ladies.
Hope you would find it an interesting and useful read. You can copy this link and browse.
http://digital.bnpmedia.com/publication/?i=87628
My earlier published article in same magazine March 2011 issue, link is below:
Despite Odds Pakistan Confectionery Continue to grow page 18-22
http://digital.bnpmedia.com/publication/?i=64500
If you are interested to know more about Confectionery and Chocolates, please visit
http://www.saifdewan.wordpress.com or search Saif Dewan at Google.
Best regards
Saif Dewan