As India nears its peak festive season, a price dilemma is simmering in the country’s mithai kitchens. Squeezed by costlier milk, ghee and butter, confectioners from Kolkata’s Sweet Bengal to Bengaluru’s Lal Sweets and national giant Bikaji are taking divergent paths to survive.
While some are nudging up prices on favourite mithai categories, others are fully absorbing cost inflation, betting that high-volume festive sales will rescue their margins. The festive season is critical for India's sweet makers, accounting for about 35% of annual sales for organized players, according to industry estimates.
Vadodara-based Jagdish Farshan plans to raise prices by about 10% this Diwali, with ghee-rich and nut-based favourites such as kaju katli and Mysore Pak expected to see the biggest increases, managing director Aakash Kandoi said.
The 88-year-old company’s procurement costs for butter and ghee have risen 10-15% from the last festive season, while milk, sugar, dry fruits and packaging have also become more expensive. It will absorb about 10% of the increase, Kandoi said, and has secured dairy and dry-fruit contracts earlier than usual to keep festive supplies steady and pricing predictable.
Sweet Bengal is taking a more cautious approach. The Kolkata-origin premium confectionery brand, operated by Anjan Chatterjee’s Speciality Restaurants Ltd, has seen input costs rise 25-30%, driven mainly by milk. But it plans to raise prices by only 1-2% and absorb most of the increase, Chatterjee said. “You can’t, being a brand, pass it on to the customer immediately,” he said, adding that stronger festive volumes should cushion the impact on margins.
The pressure is more in milk-based Bengali sweets made with khoya, kheer and malai, while cashew-based products have seen a relatively smaller increase in costs, Chatterjee said.
Ingredient mixes vary widely across mithai. For example, in plain barfi, milk solids account for about 60% of the weight. In fried sweets such as gulab jamun, oil and sugar make up 60-70%, with milk solids accounting for the rest. In cashew-based sweets, sugar makes up 40-50%, coconut or cashew butter accounts for 5-10%, and the balance is cashew paste.
Lal Sweets, the Bengaluru-based direct-to-customer sweets brand, is also choosing to absorb the increase. Its major raw material costs, including butter, ghee and sugar, have risen by12-15%, but founder Prateek Athwani does not plan to pass the increase on to consumers.
He expects costs to ease after the festive season and wants to remain competitive rather than raise prices temporarily. August through October accounts for about 35% of its total business.
Listed Indian snacks and sweets maker Bikaji Foods International Ltd is also seeing pressure from rising input costs, with chief financial officer Rishabh Jain citing higher edible-oil, moong dal and chana dal prices.
It has raised prices twice in the past four months, but plans to hold prices through Diwali as festive demand builds. “Till Diwali, we will maintain this price,” Jain said in the June-quarter earnings call on Monday.
Its packaged sweets revenue rose 4.4% to ₹42.6 crore in the June quarter, while its share of the product mix rose to 6.3% from 5.8% a year ago. Bikaji expects sweets to grow 12-13% during this year's festive period, with gifting expected to grow even faster.
Haldiram's India Pvt. Ltd didn't respond to Mint's emailed queries.
Fat of the matter
The immediate constraint is increasingly “milk fat rather than milk volumes”, said Ranjith Mukundan, chief executive and co-founder of dairy-technology company Stellapps Technologies Pvt. Ltd, adding that heat stress and tighter fodder availability are reducing butterfat yields even when overall milk production is rising.
Mukundan said farm-gate prices across the cooperative sector have risen by roughly ₹15-20 per kilogram of fat in recent months, with buffalo-milk fat seeing the sharpest rise.
Feed and fodder account for about 60-70% of a farmer’s milk-production costs, while higher diesel, cold-chain and packaging costs are adding to the pressure.
The squeeze is evident in dairy cooperative pricing. The Bengaluru Cooperative Milk Union, which markets products under the Nandini brand, revised ghee and butter prices from 24 July. A one-litre Nandini ghee sachet now costs ₹715, while 500-gram packs of salted and unsalted butter cost ₹310 and ₹330, respectively.
Amul (Gujarat Cooperative Milk Marketing Federation Ltd) and Mother Dairy raised fresh-milk prices by ₹2 a litre nationwide in May, while Verka of the Punjab State Cooperative Milk Producers' Federation Ltd, known as Milkfed Punjab, raised prices by the same amount across several variants. Separately, Punjab raised the price paid to farmers supplying Milkfed by ₹10-15 per kilogram of fat, effective 1 April.
The latest increases come after some cooperatives cut dairy-product prices following changes to the goods and services tax (GST) in 2025, highlighting how quickly prices can move in response to changes in costs and taxes. The Karnataka Milk Federation, for instance, reduced the price of one-litre Nandini ghee to ₹610 from ₹650 and 500-gram unsalted butter to ₹286 from ₹305 after the GST reduction.
Mukundan expects butter and ghee prices to remain firm to higher through Diwali, followed by a gradual easing rather than a sharp correction. He expects milk-fat availability to improve only as the winter flush improves yields, likely from January to March.
Sweet pain
For sweet makers, procurement is a key part of their festive strategy. Mukundan said dairy processors and sweet manufacturers are stepping up procurement, but the industry is ultimately competing for fat rather than milk. Some manufacturers, he said, are booking fat forward earlier than usual, tweaking blends and quietly reducing grammage to protect margins.
Lal Sweets said it is not changing its pack sizes or grammage, choosing instead to hold consumer prices and absorb the current cost inflation. It is also not seeing a significant shift towards sugar-free sweets, with Athwani saying consumers would rather eat less than give up the indulgence of conventional mithai.
Instead, Lal Sweets is looking to drive festive demand through product innovation. It plans to introduce new flavours in its Sonpapdi range, including mango, orange and chocolate, as it remains a major gifting item.
Sweet Bengal is also experimenting with new formats, including gur-and-oats modaks and chocolate-chip variants aimed at younger consumers. Chatterjee said the company is trying to make traditional mithai more relevant to a generation that is less inclined towards conventional Indian sweets.
The squeeze on traditional mithai is also accelerating a shift in the festive gifting basket, particularly in urban India, said Arvind Singhal, founder and chairman of Gurugram-based consulting firm The Knowledge Company.
“Consumers are also switching partly because of the right perception that Indian sweets are very unhealthy,” he said, citing their high sugar and oil content.
Chocolates, baked Western desserts and dry fruits are increasingly competing with traditional sweets for festive consumption and gifting, particularly among younger and middle- and upper-middle-income households.
However, given the size of the sweets market, he expects the shift to initially slow growth rather than cause an outright decline in consumption.