Business Plan for Chocolate Industry

8/12/2019 Business Plan for Chocolate Industry

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consumption.This is also because chocolate, which was considered to be an elitist food,

has cau&ht the fancy of buyers lookin& for a lifestyle item at affordable cost.

* study had pro#ected that sales of the Indian chocolate industry would rise from

>323:0 million in 399 to >3730 million by the year 2000 and to >


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So"et$"e1 2h$te #ot a##ea% on Chocolate o"et$"e3 I that a*e0

hen a chocolate &ets e/posed to temperature variances from a hot day to a cold

ni&ht (which is very common all across India), the fat e/pression happens on the surface

of the chocolate. 'This means white spots emer&e on the surface of the chocolate. This

phenomenon is called 4*at 5loo"4. It is entirely safe to consume chocolates however thefeel and the taste of the chocolate may not be the same as is ori&inally intended to.

A%e chocolate a6a$la5le *o% .$a5et$c0

Currently in India no manufacturer produces chocolates for diabetics, as the

&overnment re&ulations do not permit manufacture of such chocolates. The industry

ma#ors are liaisin& with the &overnment authorities to enable manufacture of such

chocolates in India. Chocolates for diabetics, thou&h, are available in certain parts of the

world.

Chocolate: the ne2 ol!t$on *o% 5loo. #%e!%e0

Cocoa beans have antio/idant compounds called flavanols, and scientific research

su&&ests they do &ood thin&s to blood vessels. ark chocolate contains flavanoids, an

antio/idant which helps the body by neutrali4in& potentially cell$dama&in& substances

known as o/y&en$free radicals, a normal byproduct of metabolism.

ABOUT HO,E 7 ,ADE CHOCOLATES:-

*nother area of chocolate industry in India is -%=$%*= C-C@*T=D.This

se&ment is hi&hly fra&mented and operates independently. They are more pronounced for

manufacturin& distinct flavors and varieties of chocolates in various shapes and si4e. ;ut,

these chocolates are usually priced at a hi&her price than that available for branded

products for the same Euantity. -ouse$wives from elite class usually indul&e in this kind

of business. They usually operate in local area and throu&h their contact network. Dome

home$made chocolate manufacturers manufacture really attractive "IT C-C@*T=D.


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/ROWTH OPPORTUNITIES IN INDIAN CHOCOLATE INDUSTRY:-

Unta##e. ,a%et ) L$"$te. Con!"#t$on:

The fact that chocolate is not a traditional food, hi&h prices and domestic

production problems will provide the main problems to market &rowth. *s these markets

develop, prices will fall makin& these products more accessible to the wider population.

-owever the Indian market is still untapped and provides immense scope for &rowth, both

&eo&raphically as well as product basket wise. Chocolates ri&ht now reaches about 70mn

to 7


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These manufacturers also cater to the older and the health$conscious choco$lovers,

the hi&h fibre, low fat and su&ar ones are Euite popular. *part from the festive season,

weddin&s and baby announcements also see heavy off take of premium sweet delicacies.

or those who are health conscious there is also a special ran&e of su&ar$free and diet

chocolates. These are usually bou&ht by corporate or individuals who want to make a

special statement.

esi&ner chocolates are tailored for customers who're lookin& at &iftin& chocolates

with a personali4ed touch. =mbossin& of names, lo&os of companies and personali4ed

messa&e on the chocolates are fast becomin& popular.

There are 3,000 varieties of desi&ns to choose from $$ ran&in& from &ood luck

charms, H'mas fi&urines and animals $$ and nearly


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to heat dama&e.Companies revise in&redients to make chocolate withstand heat, and so

Indian chocolates are more resilient to heat than =urupean chocolates by a factor of 2

de&rees.

!estle and Cadbury have tried to provide loans for retailers to buy frid&es, but to

hold down power costs the shopkeepers switch off the frid&es at ni&ht. *s a result thecocoa fat melts and mi&rates to the main body of the chocolate bar. hen the coolin& is

switched on in the mornin&, the cocoa fat solidifies and turns white, presentin& a bi4arre,

un$sellable white on black form.

Dmall coolers were provided to retailers to keep the chocolate from meltin&, but that

didn't Euite do the trick. =lectricity costs money and is not provided in a uniform way, so

on and off the electricity &oes and the product may suffer sometimes


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chocolates. These are not only of low Euality, but are brou&ht very near to their e/piry

dates. %ost of the cheap chocolate brands that are available do not meet Indian ood

6e&ulations.

FACTORS AFFECTIN/ THE /ROWTH OF CHOCOLATE INDUSTRY IN

INDIA:-

/oo. "onoon ensures adeEuate availability of raw materials, which are mainly

a&ricultural in nature. 6aw material prices have si&nificant influence on mar&ins.

/o6e%n"ent #ol$c$e in terms of licensin&, duties, movement of a&ricultural

commodities etc. also affect the introduction of products, time la& for a product

launches, ta/es, e/cise, etc all influence the business.

,a%et 8%o2th driven by overall economic &rowth and urbani4ation also

contributes. *n overall boomin& economy will consume tonnes of chocolates

because consumer spendin& increases. *lso, the absolute number of consumers in

middle class upper middle class increases.

R!#ee .e#%ec$at$on improves e/port reali4ations however it also makes import of

raw material (esp. cocoa) e/pensive.


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BUSINESS ,ODEL:-


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OFFER>VALUE PROPOSITION

ur area of business deals with semi finished chocolates and raw chocolates. The reason

for selectin& this is due to the need in the hotels and also as a &ift item for the corporate.

TAR/ET CUSTO,ERS

ur tar&et customers are hotels and corporate. The need of chocolates in hotel is in lar&e

demand, thou&h the makin& of it is easy the handlin& the same becomes hard.

DELIVERY CHANNEL

e prefer direct marketin& as delivery channel by which we have a direct contact with the

hotels and can deliver the product in prompt timin&s.

RELATIONSHIP BUILDIN/

In order to build a stron& relationship with the customers and to maintain a stron& bond,

discounts are &iven to the customers even at the off seasons.

REVENUE ,ODEL

e prefer to have cash and carry method for receivin& revenue but when bulk orders are

placed 7< are paid as cash and 2< a

CORE CAPABILITY

e the partners in our business are versatile in various fields like production, operations,

system marketin&, finance and human resource mana&ement. This versatility makes us

e/cel our self in our business.

CO,PETITIVE ADVANTA/E

The competitive ed&e in our business is to provide a uniEue product with a center filled

soft chocolate and also to provide seasoned chocolates with spices like cardamom, elache,

pepper and other Indian spices.


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PARTNER NETWOR?

In order to succeed in the current business a stron& relation is maintained with other co

partners like the lo&istics, dealers providin& raw materials, mechanics dealin& with the

machinery and the others relatin& to the business.

COST ,ETHOD

*s mentioned already we are usin& automated machines in our business to yield

hi&her profit our basic investment is for the machines in the form of fi/ed asset, and the

rest of the investment will be for the avenue where our pro#ect is &oin& to be estabilished

and on the human resources.

ANALYSIS OF BUSINESS PLAN:-


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,AR?ET ATTRACTIVENESS

*s the investment in the chocolate industry in low and at the same time the return from

the industry is hi&h, it finds an attractive market for our business to start. *s said by the

mana&ement &urus that the best way the start a business to have a minimum investment a

&ain ma/imum returns from it.

INDUSTRY ATTRACTIVENESS

*s the chocolate industry is in &rowth trend, we are e/pectin& to have a hi&h demand for

the chocolates in the future. Dince the demand is hi&h we find the market very attractive to

start up the business and e/cel in it.

SE/,ENT ATRACTIVENESS

;y se&mentin& the work and concentratin& on a particular field further innovation can be

implemented this in turn can result in production of bulk output with the automated

machines and deliverin& the same throu&h the delivery channel.

SUSTAINABLE ADVANTA/E

6easonable time maintenance has to be done with in to achieve the reEuirements. To have

an ed&e compared to the competitors an uniEue characteristics has to added with the

e/istin& products like the centre fillin& etc..

VISSION > RIS? TA?IN/ ABILITY

*ll the steps taken should always lead to the success path of the or&ani4ation aimin& to

reach the vision by settin& out small &oals. *nd the risk takin& ability and focus to achieve

success results in reachin& out with the vision .

CRITICAL SUCCESS FACTOR

The ?D+ of our business and the various other uniEueness like usin& of automated

machine and use of natural species makes us e/hibit amon& our competitors and results as

a critical success factor.

CONNECTEDNESS IN SC,

In order to meet out with various reEuirements like acEuirin& raw materials , maintenance

of the available machinery and other related works a proper and well maintained


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relationship has to be there and a decent knowled&e on the current happenin&s in the same

field has to done.

SUB@ECT OVERVIEW:-

TOTAL UALITY ,ANA/E,ENT:

Total Juality %ana&ement is a mana&ement concept created by . =dwards

emin&. The basis of TJ% is to reduce the errors produced durin& the manufacturin& or

service process, increase customer satisfaction, streamline supply chain mana&ement, aim

for moderni4ation of eEuipment and ensure workers have the hi&hest level of trainin&.

ne of the principal aims of TJ% is to limit errors to 3 per 3 million units produced.

Total Juality %ana&ement is often associated with the development, deployment, and

maintenance of or&ani4ational systems that are reEuired for various business processes.

TJ% and Di/ Di&ma

The main difference between TJ% and Di/ Di&mais the approach. TJ% tries to

improve Euality by ensurin& conformance to internal reEuirements, while Di/ Di&ma

focuses on improvin& Euality by reducin& the number of defects and impurities.

"ourmet chocolate Euality

"ood Euality chocolate will only have cocoa butter in it. The more cocoa butter in

"ood Euality chocolate will only have cocoa butter in it. The more cocoa butter in the

chocolate, the better the chocolate.

In our semi finished product of chocolate we use only cocoa, poor Euality chocolate

will constitute more oil in it. Cocoa butter melts at a much lower temperature than oil.

UALITY ASSURANCE

e provide the Euality assurance to fulfill the reEuirements of a product with

adeEuate confidence as a supplier. ;y providin& Euality assurance we made the &ourmet

chocolates to build the Euality into the products asF
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Juality of desi&n

Juality of conformance

Juality of performance

Juality of service

PRODUCTION PLANNIN/ AND CONTROL:

nce the entrepreneur has taken the decisions re&ardin& the product desi&n and

production processes and system, his ne/t task is to take steps for production plannin& and

control, as this function is essentially reEuired for efficient and economical production.

+lanned production is an important feature of the small industry. The small

entrepreneur possessin& the ability to look ahead, or&ani4e and coordinate and havin&

plenty of drivin& force and capacity to lead and ability to supervise and coordinate work

and simulates his associates by means of a pro&ramme of human relation and or&ani4ation

of employees, he would be able to &et the best out of his small industrial unit.

e have a machine, which is completely automate to do the process. or instance

the 2< mm diameter truffles that we make in our completely automated facility are all

centre filled which in itself is uniEue because makin& a chocolate with a soft centre fillin&

is a pretty complicated process.

Chocolates thus made by us, serve as the raw material for the institutional

customers. They buy the chocolate which is, say 20 mm , 2< mm diameter and which has

a soft core. They then &arnish or enrobe the chocolates to sell as finished products.

-otels have a bi& demand for chocolates. %any of them know how to make them

but they cannot handle beyond a certain volume. %akin& them is labour intensive work

and reEuires a lot of time. * re&ular chef who has other routine work to do will not have

time to prepare them.

e supply those semi$finished products and raw chocolates with a soft core cut of

specific dimensions and si4es. -otels process it further and sell it as finished product.


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The bi&&est advanta&e of workin& with us is we have developed our own uniEue

fillin& which otherwise has to be imported or bou&ht locally at a steep price. ur fillin&s

have one yearBs shelf$life. e have a neutral fillin& which can be customi4ed to suit

anybodyBs reEuirement. e #ust have to add the natural flavors and customi4e it for end$

user reEuirements.

LO/ISTICS AND SUPPLY CHAIN ,ANA/E,ENT:

Dupply Chain %ana&ement (DC%) is the mana&ement of a network of

interconnected businesses involved in the ultimate provision of product and service

packa&es reEuired by end customers (-arland, 3995). Dupply Chain %ana&ement spans all

movement and stora&e of raw materials, work$in$process inventory, and finished &oods

from point of ori&in to point of consumption (supply chain).

Dupply chain mana&ement is a cross$function approach includin& mana&in& the

movement of raw materials into an or&ani4ation, certain aspects of the internal processin&

of materials into finished &oods, and the movement of finished &oods out of the

or&ani4ation and toward the end$consumer. These functions are increasin&ly bein&

outsourced to other entities that can perform the activities better or more cost effectively.

The effect is to increase the number of or&ani4ations involved in satisfyin& customer

demand, while reducin& mana&ement control of daily lo&istics operations. The purpose of

supply chain mana&ement is to improve trust and collaboration amon& supply chainpartners, thus improvin& inventory visibility and the velocity of inventory movement.

*s for our semi$finished chocolates our supply chain mana&ement plays a ma#or

role for our delivery of the product to the customers. e deliver the products throu&h the

different modes of transportation like motor vehicles, van, fli&hts, etc.,

PRODUCT ,ANA/E,ENT:

+roduct mana&ement is an or&ani4ational lifecycle function within a companydealin& with the plannin& or forecastin& or marketin& of a product or products at all sta&es

of theproduct lifecycle.

+roduct mana&ement (inbound focused) and product marketin& (outbound focused)

are different yet complementary efforts with the ob#ective of ma/imi4in& sales revenues,
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possible but it may reEuire hu&e investments and benefits may be less. or evaluatin& this,economic feasibility of the proposed system is carried out.

In our business to improve upon the Euality automated machines are used for massproduction thus reduces the price and at the same time we can &enerate hi&h mar&inalprofit.

Econo"$c Fea$5$l$t+

or any system if the e/pected benefits eEual or e/ceed the e/pected costs, thesystem can be #ud&ed to be economically feasible. In economic feasibility, cost benefitanalysis is done in which e/pected costs and benefits are evaluated. =conomic analysis isused for evaluatin& the effectiveness of the proposed system.

O#e%at$onal Fea$5$l$t+

perational feasibility is a measure of how well a proposed system solves theproblems, and takes advanta&e of the opportunities identified durin& scope definition andhow it satisfies the reEuirements identified in the reEuirements analysis phase of systemdevelopment.

?sin& the efficient lo&istics supply chain mana&ement, promotion tactics,strate&ic alliance with our customers we are able to overcome the main threat faced bychocolate industry i.e., temperature, transportation, availability of raw materials, properrefri&eration, imported brands.

,AR?ETABILITY

The consumption of chocolate$based confectionery follows special laws. e know that

the level of chocolate consumption in a &iven country depends on the prevailin& climate,

the dietary habits, and the &rowth of &ross national product. This Lchocolate lawM also

e/plains the development of the different markets over the past few decades.

Business Plan for Chocolate Industry

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