Nearly 70% of Perfetti's business in India comes from the ₹1 segment, which dominates small mom-and-pop stores and drives the bulk of category sales. The company plans to increase the share of its ₹5-and-above portfolio from about 30% over the next three to four years; this number stood at just 7% in 2019. Execution will hinge on wider distribution expansion and product innovation.

"We don't want the ₹1 business to shrink in absolute terms. In fact, we want it to continue to grow and remain profitable. The strategy is not to eliminate ₹1, but to ensure that ₹5 and ₹10 products grow much faster. If that happens, the mix will change naturally over time," said Nikhil Sharma, managing director of Perfetti Van Melle India. "I would like to double the turnover in the next three to four years. That would be a meaningful and ambitious goal for us," he added.

In fiscal year 2025, Perfetti reported revenues of ₹3,500 crore.

Perfetti is the largest player in India's sugar confectionery market, competing with ITC Ltd, Dharampal Satyapal (DS) Group, and Parle Products. Earlier this year, Noida-based DS Group reported that its decade-old hard-boiled candy brand, Pulse, crossed ₹750 crore in annual revenue.

The distribution challenge

The main hurdle in moving consumers up the price ladder remains distribution. "Most companies remain stuck selling candies at the ₹1 and ₹2 price points despite the rise of UPI, which has made payments for low-ticket items easier. This is largely because children armed with loose change of ₹10-20 continue to be the predominant consumers of candies," Sharma said.

Currently, Perfetti's ₹10 portfolio reaches about 200,000 outlets, compared with several million outlets for ₹1 products.

"The single most important task for us over the next five years is to make sure the ₹10 portfolio reaches one million outlets. If even one ₹10 product can reach one million outlets, that alone would be transformational for us. Similarly, we want the ₹5 portfolio to go to two million outlets. Consumer willingness is not the issue—the challenge is reach," Sharma added.

Bite-sized market

India's confectionery market was worth ₹14,800 crore as of May, according to NielsenIQ (NIQ). The category posted 8% value growth in FY25, driven largely by increased consumption, with medium and large manufacturers playing a significant role. Hard-boiled candies and toffees remain dominant, posting double-digit growth, though innovation is increasingly focused on higher-priced categories like jellies.

Jellies, which account for less than 10% of the overall market, have grown rapidly over the past three years. Perfetti sells jelly under the Chupa Chups brand.

"The category is exploding and we are putting our money behind it. Jellies offer far more headroom—whether in formats, textures, flavours or shapes. Sour profiles, in particular, are scaling better than masala flavours, which tend to be more polarising," Sharma said.

India has emerged as Perfetti's third-largest global market by sales, overtaking China earlier this year. Centre Fruit, a soft chew, is the company's largest brand in India.

Business enablers

Recent changes to the goods and services tax (GST) have offered temporary relief.

As of 22 September, GST on sugar candies fell from 18% to 5%. The reduction has provided "breathing space," Sharma said, particularly at the ₹1 price point, allowing companies to maintain grammage and reinvest savings into brands.

"For us, the real benefit of GST is not so much affordability in a ₹1 category—it's innovation. Lower taxes give us room to improve product quality at the same price point. That could mean better flavours, better intensity or formats that were earlier not viable," Sharma said.

Sour flavours are also gaining popularity over masala. "While masala has delivered occasional breakout hits, sour has broader appeal," Sharma noted.

Innovation at very low price points remains challenging. New ₹1 launches tend to be margin-dilutive, which is why Perfetti is increasingly focusing on ₹5 and ₹10 products.

Even as the wider FMCG market faces pressure from new-age brands, Sharma said the candy category remains insulated for now.

"This is a category that is deeply distribution-led. You may have a great product, but unless you can industrialise it and distribute it nationally, it's very difficult to build scale," he said.

Competition remains intense at the bottom end: "Even small price or grammage changes at the ₹1 price point can significantly impact volumes. Attempts by some players to move from ₹1 to ₹2 have shown that price hikes can sharply dent sales, especially in small towns and rural markets," Sharma added.