Singapore, Oct. 8 - The Indian sugar confectionery market is projected to expand at a compound annual growth rate of 8% until 2011, according to a study completed in September by global market research company Euromonitor International.
The retail value of the Indian sugar confectionery market, which includes products such as sweets, jellies and gums, is estimated to hit $461 million this year and projected to reach $498 million in 2008.
The yearly growth rate from 2002 to 2006 was 7.2%, according to figures from Euromonitor.
"The increase in (compound annual growth rate) over the forecast period is due to an expected rise in retail value growth as affluent consumers increasingly show a tendency for impulse purchases of products such as sugar confectionery," said the report.
The development of supermarkets, hypermarkets and convenience stores coupled with the trend towards higher allowances for children are likely to be the primary growth drivers for sugar confectionery, it said.
India is the largest consumer of sugar in the world, with domestic consumption of around 19-20 million metric tons a year.
It is also the second largest producer of sugar in the world, and is predicted to overtake Brazil as the top sugar producer next year with over 33 million tons, according to the International Sugar Organization.
However, greater health awareness could trim the sales of sugar confectionery, as well as a growing trend of upgrading from sugar confectionery to chocolate confectionery.
"The high number of foreign products and brand variants available in chocolate confectionery is expected to be a major factor in the more economically advanced regions of North and West India, where there is already a visible preference for chocolate confectionery," said the report.
The Indian candy market is currently valued at around $664 million, with about 70%, or $461 million, in sugar confectionery and the remaining 30%, or $203 million, in chocolate confectionery.