Can the Cookie Crumble

8/14/2019 Can the Cookie Crumble

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B U S I N E S S

Pricing, promotion and distributionform the three pillars of theimpenetrable biscuits segment.

The Indian biscuitsindustry has welltypified the knack ofimporting a foreignidea and customis-

ing it to the needs of the domesticenvironment. In a segment overa hundred years old with morethan 60 incumbents, the chunk ofmarket share is held by just threebrands. So, what is the future ofcompetition in the Indian biscuitcategory?

By Bhavya Misra

The biscuit sector of India isamongst those few, which are rep-resentative of a monopolistic com-petition put up by a troika of threelarge companies competing not onlyagainst others, but also amongst eachother. When ITC launched biscuitsin the year 2003, the share of Bri-tannia and Parle, according to theEuromonitor International reportBiscuits in India, released in August2008, was 34.7 percent and 34.2percent respectively. ITCs share in

a rally race between the players fothe consumers pockets, it cannot bdenied that they are well being testefor their salt, even if the competitiocontinues to stiffen.

Penetration of branded biscuihas been intensifying, the share othe unorganised biscuits sector is fabeing eroded by the national brandIt goes without saying that the national brands have invested in plenof groundwork to make the cookcrumble their way.

that year happened to be 1.4 per-cent. While ITCs share increasedto 2.4 percent in 2004, that of Parledropped to 33.5 percent and that ofBritannia saw a minuscule increaseof 0.3 percent, to 35 percent. Theequilibrium set between the-thentop two brands Britannia and Parlefurther dwindled to a minute de-crease in their shares to 34.1 percentand 32.8 percent respectively in theyear 2005, while that of ITC shot upto 5.2 percent.

The respective company shares inthe biscuits industry for Britannia,Parle and ITC, for the year 2007, asper Euromonitor International esti-mates, stood at 34.8 percent, 32.0percent and 8.8 percent respectively.

While the three brands constitute awhopping 75.6 percent share of thetotal market, the rest of 23.2 percentspace is acquired by multifarious re-gional players and a 1.2 percent shareis held by just-emerging private labelplayers. Although the figures indicate


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Britannia, which has been pres-ent on the Indian turf since 1892,has tread very gingerly on the roadto brand success. The more-than-hundred-years-old company hasconstantly been adapting itself to the

demands of the consumers and themarket. For the year ending March2008, biscuits, Britannias core busi-ness, reportedly accounted for 90percent of the companys net sales,contributing a staggering USD 650million.

In September 2008, Britannia wasincluded in the list of eight examplesof Creative capitalism published inTime magazine. The product portfo-lio of Britannia biscuits includes tenbrands, namely, Tiger, Good Day,50-50, Britannia Marie Gold, Treat,Nutri Choice, Little hearts, MilkBikis, Time Pass Nimkee and NiceTime. The brands are strategicallypositioned to make consumers iden-tify with them in their daily lives.

Communicative branding

Britannia: Tiger biscuits, launchedin the year 1997, have become themass-market face of Britannia, andalso the largest selling brand in Bri-tannias biscuit basket along withBritannia Good Day. Tiger biscuitsare positioned for modern mothers

who are on the lookout for the bestenergy products for their childrenin a competitive world. Tiger glu-cose biscuits have been fortified withIron Zor with an attempt to addressthe Iron-deficiency crisis many In-dian children face. In recent times,the Tiger biscuits portfolio has alsobeen extended to comprise four vari-ants Tiger Coconut, Tiger Creams,Chota Tiger, Tiger Banana and IronZor.

In sync with their strategy of cal-culated innovation, Britannia hadlaunched Tiger Coconut, coconut

flavoured energy biscuits, in the year2001. This was followed by TigerCreams, which were introduced inthe year 2002, in a number of fla-

vours such as Orange, Elaichi, Choc-olate, Pineapple, Strawberry andButterscotch. Chota Tiger, which

was launched in 2007 as an exten-sion of the Tiger glucose biscuits, is amini-sized poppable glucose biscuit

with coloured sugar sprinkling and isoffered in two variants Milk Spar-kies and Choco Sparkies.

Britannia Good Day, which waslaunched earlier than Tiger biscuits,in the year 1986, has also made itsplace as one of Britannias largest sell-ing biscuit brands. Good Day bis-cuits were launched in two flavours,

Cashew and Butter. Consequently in1989, Good Day Pista Badam waslaunched, followed by Good DayChocochips in the year 2000 andGood Day Choconut in 2004. Thebrand persevered to infuse cheer,hearten the nation and enliven lives,

which was indicative in their ad slo-gan, Iska to ho gaya re good day.

Falling under the crackers seg-ment, the Very Very Tasty Tasty, Bri-tannia 50-50 biscuits was launchedin the year 1993. This sub-brandhas also met with considerable suc-cess, becoming the market leader inthe crackers category. 50-50 crackersare targeted at young consumers; thebrand has been promoted on a funplank. In 2001, the Maska Chas-ka variant of 50-50 crackers waslaunched to resounding success.

The Marie Gold sub-brand is theoldest in Britannias portfolio, span-ning nearly fifty years. The brand isamong the six Pillar brands of Bri-tannia, the others being Tiger, 50-50, Good Day, Treat and Milk Bikis.Marie Gold biscuits fall under thecategory of the traditional tea-time

biscuits.Launched in the year 2002, Bri-tannia Treat is the umbrella brandfor all the cream-filled offeringsfrom the company. The biscuits areagain targetted at kids, and comein varied flavours such as the classicBourbon and Elaichi, fruit-flavouredCreams such as Orange, Pineapple,Mango, and Strawberry; the Jim Jamrange (jam-filled biscuits) and, theDuet range, which are biscuits withtwo flavours of cream filled betweenthree layers of biscuit. Two vari-ants Strawberry Vanilla and Duet

Strawberry Chocolate are offeredunder this sub-range. Under theTreat Brand, Britannia also launchedFruit Rollz in the year 2006. FruitRollz extend beyond the cream bis-cuit range and are soft rolls filled withthe essence of real fruits providing ahealthy yet scrumptious treat forchildren. Another interesting variantin the Treat range is the Treat ChocoGello, which was launched nation-ally in August 2007 and propagatedthe slogan, Double masti ka double

dose. Treat Choco Gello is a combi-nation of chocolate and caramel in asingle bar.

The Treat sub-brand featuresthe Funtoosh character as its brandmascot. Funtoosh is a guy who sym-

bolises mischief and fun, and accord-ing to Britannia, he will pull off anytrick to make sure he gets to eat hisBritannia Treat!

Milk Bikis by Britannia pro-moted the idea of Eating milk ina yummy way. The brand becamepopular with Indian mothers, as itreplicated milks benefit as a sourceof energy for growing children. Hav-ing established considerable loyaltyfor itself, the Milk Bikis brand cameup with a new variant, Milk Cream,in the year 1996. These round MilkCream biscuits come with smileyfaces and are laden with milk creamto appeal especially to children. Inthe year 2006, Britannia renovatedMilk Bikis by adding what it calledDevelopment Fuel to the product.These new Milk Bikis come in an in-teresting honeycomb design and anenhanced product experience beingfortified with so-called Smart Nu-trients such as iodine, iron and thefour vital vitamins.

Britannia broadened its focus oftarget consumers from children toadults with the launch of the Bri-

tannia Nutri Choice rangein 1998. The range com-prises three variants Nu-triChoice Thin Arrowroot,NutriChoice Cream Crackerand NutriChoice Digestive.NutriChoice Thin Arrow-root contains the benefits ofarrowroot, which aids diges-tion and removes harmfultoxins from the body. Priorto 1998 it was being market-ed as Britannia Jacobs Thin.

NutriChoice CreamCrackers have a neutral taste

and are propagated with thestatement, As nature wouldhave wanted it to be. Nu-triChoice digestive biscuits aremade with 50 percent whole-

wheat and packed with addedfibre, which meets ten per-cent of ones daily fibre needs. Nu-triChoice Sugar Out was launched inthe year 2007, and has the USP ofno added sugar, despite the producttasting sweet. It is sweetened withSucralose, derived from sugar,

which provides the same sweetnesany other biscuit, without the adcalories of sugar.

The newest variant of Brinia NutriChoice happens to be NutriChoice 5 grain biscuits, wh

are made from five healthy cals Oats, Corn, Ragi, Rice,

Wheat. The biscuits are sweete with natural honey, and also cin a convenient packaging conting several small single-serve pocmeals packs, making it easier for oof-home consumption.

The other biscuit brands have reflected Britannias hallmof innovation are Britannia NTime, Britannia Time Pass and tannia Little Hearts. Little He

was launched in the year 1993 is targeted at the youth segmThis was the first time biscuits wretailed in pouch packs like po

wafers. The product was suppo with launch messages, whichcording to Britannia, could melthearts of even characters like Draand Frankenstein. Four years latethe year 1997, the company let loan ad campaign that encourayoungsters to openly express tfeelings. The campaign was calDirect dill se. Subsequently, inyear 2003, two variants called L

Britannia has consciously pro-

moted its products on a health

plank, while broadening focus

include young and adult consu

ers alike.


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Hearts Chocolate and Little HeartsSesame were rolled out with a cam-paign Dil sabka actually sweet hai.

Britannias Nice Time biscuitspioneered sugar-sprinkled biscuitsin India, while Britannia Timepass,

launched in the year 2000, was sup-ported by aggressive advertising,positioning it as the perfect compan-ion for timepass moments. BeforeTimepass, Snax was Britannias of-fering in the salted snacks category.The same was revamped as a lighterproduct and renamed as BritanniaTimepass Classic Salted. The Nim-kee variant in Timepass brand waslaunched in the eastern market andsubsequently expanded nationwide.

Parle Products: Succeeding Bri-tannia was Parle Products Pvt Ltd,

which emerged in the year 1929 with a small manufacturing facilityin Mumbai producing sweets andtoffees. A decade later, in 1939, themanufacturing facility was upgradedto manufacture biscuits. ManishMishra, zonal sales manager, ParleProducts Pvt Ltd. says, Before set-ting up the manufacturing facil-ity at Ville Parle in Mumbai, one ofthe-then directors of the company,Narottam Chauhan, visited a num-ber of countries abroad and gainedsubstantial technical knowledge and

feedback on the manufacture of bis-cuits. We thus began, initially, withthe manufacture of Marie biscuitsand then moved on to the Parle Gglucose biscuits.

The Parle Products basket ofbiscuits comprises well entrenchedbrands such as Parle G, Krackjack,Krackjack Crispy Creams, Monaco,Kreams, Hide N Seek, Hide N SeekMilano, Parle Digestive Marie, ParleMarie, Milk Shakti, Parle 20-20Cookies and Nimkin. With twelvebiscuit brands in its portfolio, ParleProducts has been able to maintain

a tight stronghold on the biscuitsmarket. Parle G is now over 65 yearsold, and is also the brand that catersto the mass market segment of Parle

Products. With the G in Parle G in-dicating Genius, Parle G has beentargeted as an healthy snack with thebenefits of milk and wheat and thusclaims to be, Hindustan ki Taaqat.

The sweet and salty Parle Krack-

jack, launched in the year 1972, isclaimed to be the worlds first sweetand salty biscuit range. Symbolic ofcapturing the tastes of relationshipsin a biscuit, they are positioned withthe statement, Its not just a biscuit,its the taste of relationships capturedin a biscuit.

Instilling the desire among con-sumers to add a pinch of salt totheir lives were the Parle Monacosalted biscuits. The biscuits aim toadd a twist to lifes ordinary mo-ments with the Great taste of any-time, anywhere Monaco biscuits.Monaco biscuits are light crispy bis-cuits sprinkled with salt. Milk Shakti,another biscuit brand by Parle Prod-ucts, went national in the year 2003.Pitted against Britannias Milk Bikis,it is fortified with the health benefitsof milk and honey, thus intending totransform kids, the prime target seg-ment, from being boy-next-door tosuper boys. Parle Nimkin, accordingto Parle Products, are crispy crack-ers that add zing to usual biscuits.It has been positioned for anytimeconsumption, be it with tea, evening

snacks or to salt up the thoughts in adaily routine.In the cream biscuits segment,

Parle Products has launched ParleOrange Kream biscuits, which seekto tickle the taste buds with tangyorange cream between two layers ofbiscuits. The biscuits are targeted atall age segments. Parle Marie biscuitsare targeted for pass time consump-tion with the slogan, Batcheet bak-bak aur Parle Marie. Until last year,Parle Marie biscuits were known asParle Marie Choice, and have beenre-launched as Parle Marie biscuits,

currently being aggressively promot-ed with commercials.

The Digestive Marie sahi Ma-rie biscuits claim to be authenticMarie biscuits that change consum-ers daily sipping and dipping habits.They have, according to Parle Prod-ucts, five times more fibre than theregular Marie. With lower fat andcalories than other digestive biscuits,Digestive Marie claims to help onestay active and lightfooted all day.Hide & Seek biscuits, the premiumsegment offering by Parle Products,are chocolate biscuits with embed-ded chocolate chips. They are pro-moted with the tagline, Tasty itnake dil aa jaye.

Parle Products foray into thecookies segment is typified by the

Hide & Seek Milano cookies. As theysay, Theres a secret behind everyMilano, the ingredients of the Hide& Seek Milano cookies are a well-guarded secret. The cookies are posi-tioned to identify themselves with anelement of romance. Another recentoffering from Parle Products for thehigh-end segment is the Parle 20-20cookies. The cookies come in twoflavours Cashew and Butter.

ITC Foods: ITC Foods, theyoungest child in the national bis-cuits brand family, forayed in theyear 2003 with the Sunfeast range

of glucose, marie and cream biscuits.

With their consistently rising share othe biscuits market, the company halready invited the ire of pre-existincompetitors. A well carved out straegy from the outset has made ITa formidable player in the biscuiindustry as well. Chitranjan DaCOO, ITC Foods, remarks, Thbiscuits market is a large nationmarket. And, the foods segment one of the largest categories. Thu

with our distribution strength acroIndia, it is a very natural market fous to be in.

It has also the ingredients of good FMCG one can build brandon over years and distribute it, coupled with the fact that there is a lot o

manufacturing expertise in ITC.Sunfeast, the biscuits branfrom ITC Foods, spills out its branessence, Spread the smile, with clearly identifiable brand mascoSunny., whose essence connothappiness, contentment, satisfation and pleasure, and reinforces thbrands emotional aspects.

ITC Foods offering in the mrie segment of biscuits was the oange flavoured marie, indicating thcompanys product innovation eforts from the start. Treading diffeently on the known roads to succes

ITC Foods came out with eight flavours in the cream biscuits segmenand the Sunfeast range of glucos

Biscuits have ahigh penetration ingeographies wheretea is a preferredbeverage.

Britannia extended the Treat brand with

Treat Rollz.

ITC Foods has used its phenomenal distribution network to stake a

claim in the Rs 8,000-crore biscuit market.


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biscuits, the three largest selling bis-cuit varieties in India.

For the premium segment, ITCFoods came out with Sunfeast DarkFantasy, a dark chocolate with vanil-la cream offering, in select markets.

Consequently, ITC Foods also cameout with milk biscuits under thesub-brand Sunfeast Milky Magicin the general milk and milk creamcategory. In recent years, ITC Foodshas enhanced its biscuits portfolio toinclude salted crackers and cookies.The Sunfeast Snacky salted crackersare present in two variants ChilliFlakes and Classic Salted.

Simultaneously, ITC Foods hasnot offered any leeway to consumersto slip out of Sunfeasts strangleholdby launching the Sunfeast Specialcookie range, which is also avail-able in select markets. The SunfeastSpecial range currently includescookies in three variants Butter,Cashew and crunchy Coconut, as

well as cream biscuits in two variants Choco and Orange. The recentlylaunched Sunfeast Golden Bakeryalso offer the freshly baked taste ofcookies in three variants Choco-nut, Butter-nut and Butterscotch.Sunfeast Nice is ITC Foods chal-lenge to Britannias Nice Time sugar-sprinkled biscuits.

The successful penetration of

Sunfeast has been encouragingenough for ITC to extend the brandname to other products like pastas.The pasta segment was further ex-panded with the launch of SunfeastBenne Vita. The Sunfeast Benne

Vita range was enhanced further, with the launch of Sunfeast BenneVita Flax Seed biscuits that reflectedthe brand essence of Benne Vita,

which in Italian stands for GoodLife. The flaxseed content in theseprotein and mineral enriched bis-cuits, according to ITC Foods, is arich vegetarian source of Omega 3.

Continuing its focus on the healthsegment, Sunfeast extended the bis-cuits portfolio to the nutritional seg-ment with the launch of SunfeastSachins Fit Kit a range of healthyproducts co-created with SachinTendulkar. It was for the first time inIndia, according to ITC Foods, thatan icon of the stature of Sachin Ten-dulkar was actively involved in theproduct development process, as co-creator of the Sunfeast Sachins FitKit range. Sunfeast shares the vision

with Sachin Tendulkar to enable theproducts under Sunfeast Sachins FitKit range in creating Champions ofTomorrow. The launch range com-prises two offerings Sunfeast Sa-chins Vitamin and Protein enriched

biscuits and Sunfeast Sachins Multi-grain biscuits.

Local bites

Having talked about the nationalbrands, there are a number of region-al brands in the country also whoenjoy a strong local foothold in theirmarkets of presence. Parle ProductsMishra informs, After Britannia andITC, there are three regional playersin the eastern part of India BiskFarm, Raja Biscuits and Bhagwatibiscuits that dominate the market.

As far as Parle Products is concerned,it stands at the sixth position in east-ern India, following the two nationaland the three regional brands. In thestates of south India like Karnataka,Mishra informs that Parle Productsis the market leader.

In Tamil Nadu, Britannia standsat number one position and at thesecond position is Parle Products,

while in Kerala, our market pie is inthe ratio of 50:50. We are facing a

very close competition with Britan-nia in Kerala. On the other hand, in

the northern states of Haryana andRajasthan we are the clear leaders,Mishra adds.

The Euromonitor Internationalreport also elucidates the individualmarket shares of a few leading re-gional biscuit brands in India. SajIndustries, which own the Bisk Farmbrand, occupies a market share of 1.2percent, which is a little lower than

what Surya Foods Private Limited,the owners of the Priyagold Biscuitsbrand, holds. The share of PriyagoldBiscuits stands at 1.5 percent, a fig-ure that, according to Euromonitor

International, has remained stagnantsince 2005. Surya Foods Priyagoldbiscuits have presence in states suchas, Delhi, Uttar Pradesh, Haryana,Punjab and Rajasthan. While SuryaFoods started manufacturing Priya-gold biscuits in the year 1992, BiskFarm jumped onto the bandwagonin the year 2000, and quickly postedan impressive growth rate over itspredecessor. However, the share ofBisk Farm biscuits went down to1.2 percent in the year 2007, from

its previous share of 1.4 percent inyear 2004 across 2006. The productportfolio of Bisk Farm and Priyagoldbiscuits comprises almost similar bis-cuit categories like crackers, creambiscuits, maries, cookies and others.

According to B. P. Agarwala, CMD,Surya Foods & Agro Ltd., the jour-ney of Priyagold Biscuits has not beeneasy as there was the huge challengeof establishing a strong consumerpreference for Surya products despiteserious competition from establishedplayers in the market.

Our strong brand building anddistribution capabilities have enabledus to establish a sizable market sharefor our products. Priyagold has seen

a tremendous growth in the past 15years and, we are growing at a rateof 20-25 percent(average) per year,he adds.

Another prominent player in thebiscuits market in India is the Aus-tralian speciality cookie major, Un-ibic, which entered India in the year2005. The speciality cookie majoris present in India with its brands

Anzac biscuits and Bradman, and

has been expanding its geographpresence in a phased manner. WUnibic products are retailed atleading supermarket chains and ditional grocery stores, it has bslow on aggressive brand promotPerhaps because it was legally clenged by Britannia against a Uncommercial that had the taglWhy have a good day when can have a great day? The commcial directly pitted Unibic agaBritannias top performing brGood Day, and eventually lost tolatter in the lawsuit. Unibic bisccater to the high-end segment have been very low key on promtional activities, despite the fact

brand loyalty does not exist in biscuits segment, and that, proed right product and promotiolarge share of the consumer segmcan be drawn in.

While the product offerings frregional and national brands hbeen quite similar, what becomesportant is to analyse the factors have been contributing to growtthe category.

Product offeringsfrom regional andnational brands areoften quite similar,though they differ inmarket penetration.

Unibic biscuits are now omnipresent across modern and traditiona

grocery retail channels.


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Necessity becomes themother of consumption

The Euromonitor Internationalreport speaks of a consumption tran-sition that biscuits have gone through

in recent years. The report states,Biscuits in India have evolved frombeing just tea-time snacks to snacksthat can be eaten at any time of theday. With modern Indian consumersleading increasingly busy lifestyles,there has been a disintegration ofproper meal times, and most con-sumers now consume several smallmeals through the day rather thanthree square meals, as was the case ageneration ago. As a result, snackingproducts in general, and biscuits inparticular, see growing demand.

In general, biscuits are perceivedto be nourishing and healthier thanother snack products such as choco-late confectionery, ice cream andsweet and savoury snacks, leading toa double-digit growth in both vol-ume and value terms in 2008.

The report informs that the bis-cuits industry in India acquired a

value worth Rs 71 billion in 2008,growing at a rate of 15 percent incurrent value terms. It further states,The growth in biscuits stems fromboth the economy and the premiumsegments, with plain biscuits and

savoury biscuits being consumedby consumers in the lower-middleincome segments, and sandwich bis-cuits and cookies being increasinglyconsumed by middle- and upper-middle-income consumers.

Parles Mishra corroboratesthe fact that biscuits have become

anytime snacks and stipulates tworeasons for the trend. Keeping inmind the fact that a substantial per-centage of Indian population stays inrural and semi-urban areas, biscuits,because of their economic pricing,

become the most affordable snacksfor this segment. For the high-endsegment also, the affordability fac-tor and the hygiene and conveniencethat biscuits offer, become a drivingforce, he elaborates.

For high-end consumers, bis-cuits are a preference at occasionsthat may vary from tea-time snack-ing to business meetings to family gettogethers to travelling and such.

The Euromonitor report corrob-orates this view, confirming that therapid rise in consumerism in semi-urban and rural areas has favouredthe growth of premium indulgenceproducts such as filled biscuits.

Samar Singh Sheikhawat, VP,marketing of Spencers Retail, whichretails the extremely successful privatelabel Spencers Smart Choice cookies,states, Biscuits have high penetra-tion in the geographies where tea is apreferred beverage (northern, westernand eastern India). It has a tea-timeconnect, and the communicationsdone to build the category tradition-ally aimed at tea-time connections.For the balance of the geography

savories are preferred, price point be-ing the decision maker for purchase. Also the ease of finger snacking hasworked to its advantage.

Sheikhawat informs that biscuitscontribute six percent of the total

FMCG sales at Spencers stores. Fur-ther elaborating upon the reasons thatmotivated the retailer to foray into thecookies segment, Sheikhawat states,Packaged cookies as a sub-segmentof FMCG biscuits in our country has

had low penetration and as such thestrategy in this case is that of increas-ing penetration for packaged cookies.This has also been a case of categorybuilding exercise, through differenti-ation in flavour profile and value formoney price points.

The pricing game

The ubiquitous presence of bis-cuits is a consequence of a numberof causal factors. The snack, whichhas a per capita consumption of 1.8kg only in India, as compared to the2.5-5.5 kg per capita consumptionin Europe and USA, has had an ex-tremely wide penetration owing tothe efforts of market leaders such asBritannia, Parle Products and ITCand also because of the leading re-gional brands.

With their might, these compa-nies have been able to create a bul-

wark against outside brand invasion.The biscuit market in India is alsoextremely fragmented with a sub-stantial proportion of sales account-ed for by the unorganised sector. In

such a competitive scenario, biscuitsbecome highly price sensitive. Thereis a fairly high possibility of the de-mand for a particular brand dipping,if it attempts to move up the priceladder in its biscuits portfolio. This isalso because brand loyalty in biscuitssector happens to be frail.

Fundamentally, the biscuits in-dustry is not as price sensitive as itis made out to be. Competition is

what makes it price sensitive. If thereis competition there will be a pricebenchmark along with an imagebenchmark which a consumer will

see and decide, as to what he valuesmore and what he values less, ITCsdar states.

A typical biscuit portfolio of acompany straddles across the econ-omy and the high-end consumersegment. Thus, while Parle G, Ti-ger Glucose and Sunfeast Glucosebiscuits cater to the price-sensitivemasses, Parle Hide & Seek, SunfeastDark Fantasy and Britannia GoodDay cookies address the higher-endconsumer segment. Mishra remarks,

As far as the glucose biscuits category is concerned, none of the compnies in India have raised their MRPfor many years. We at Parle Produchave not increased the MRP of Pale G biscuits over the last 12 year

though we have reduced the grammages.

Glucose biscuit brands are baseon the value-for-money concep

while the premium brands being catered to the high-end consumers dnot have such a price limitation. Thconsumers of premium biscuits dnot bother too much about the prices. Hence, in the premium biscuicategory, we raise the prices, but dnot reduce the grammages.

While Parle Products is primaily an economy segment playeITC Foods with its economy branSpecial and premium brand, DarFantasy echoes Britannias strategof having different brands at diffeent price points to cover all segmenin biscuits. Thus, while Britannoffers Pure Magic at the premiumend, ITC matches up with the DarFantasy brand. At a standard levboth have flagship brands Britannia Treat and ITC Sunfeast whiBritannia Tiger and Special servthe economy segment. This ensurboth bottom- and top-line growth

with both volume and value growt

attained from different segments. As for the private label playethat currently account for a share oone percent in the total market, th

wide reach of unorganised prodution in the form of bakeries that sebiscuits at a discount to brands, bcomes a limiting factor. About Specers pricing strategy, Sheikhawinforms, Spencers Smart Choicproducts are priced at least 10 pecent less than the market leader anare promoted at par or more. Thsensorial appeal of our products is least as good as the market leader.

Cracking the market

For now, the Indian biscuimarket appears to be a tough nut tcrack. Even as Britannia and ParProducts were still busy gauging thmarket trends and catering to themITC Foods jumped the wagon witinnovative and aggressively promoed biscuit brands. The launch of ieconomy brand, Special was lowkey, but the distribution strength o

Spencers Smart Choice cookies are

priced at least ten percent lower than

the market leader.


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the parent company, ITC Ltd., en-sured phenomenal reach and place-ment.

ITC Foods also raised its adver-tising spend in order to popularisethe new products. The publicity

strategy of ITC Foods has hingedround television advertising; thecompany has also used some of thebest known faces from cinema andcricket to promote its brands. It hasbeen balancing television advertising

with print and outdoor media as wellas point of purchase (POP) materialsand promotions.

Britannia, on the other hand,has been on an even keel in terms ofadvertising spends, while Parle Prod-ucts, which has maintained a lowprofile on the advertising front, oflate, has also increased its advertisingspend by making use of celebrities tocreate mass appeal for its brands.

Assessing the competitive sce-nario in the biscuits industry in In-dia, Mishra states, If we gauge the

competition, it varies across differentcategories of biscuits. In the pre-mium biscuits segment, Britanniais dominating with the Pure Magicbrand, but in the mass segment,Parle Products is the dominating

company. The Marie Gold brand ofBritannia is holding a market shareof 65 percent in its category. As forITC Foods, my belief is that they arestruggling to enhance market share.The expenditure incurred by ITCFoods on promotion of their biscuitsis something that no other player hasexercised, and this strategy may beaffecting their bottom lines.

When ITC entered the biscuitssegment, they directly competed withBritannia and not Parle Products.Their strategy has been to acquire apart of the Tiger biscuits share.

Dar remarks, If weve got ashare, obviously weve pulled it fromsomebody.However, more importantis the fact that the industry is notstatic, its growing, and consequent

to this growth is the factthat there is a large share ofthe pie that everybody canbenefit from.

There is a certain sharedilution, which will hap-pen with aggressive nuclearcoming in, but at the sametime the industry is grow-

ing and as long as there isgrowth, there will be placefor all, he points out.

On the role of market-ing for ITC Foods biscuits,Dar states, Advertisingand promotion is a com-bination between creatingpull and delivering value.If youre a national player,obviously, youd like tobe known nationally, andtherefore, to that extent,marketing and promotionbecome crucial.

Remarking on thecompetition scenario inthe biscuits segment, Su-nil Awatramani, manag-ing director, Diat Foodscomments, Competitionin the biscuits segment is very stiff. And I believe itis going to stay like that.

Diat Foods manufactures dia-betic foods such as sugar free cook-ies, cakes and chocolates. Its brandSugarless Bliss has already become

a rage among health-conscious con-sumers in India.

Even as ITC Foods on the onehand continue to wage a war of sortsin the biscuits industry, Britanniahas flexed its muscles to reach out toa broader target segment. A greaterconcentration on innovation in prod-ucts targeted at the youth, reflectedin different product formats andpackaging of Britannias products isalready evident. Britannias attemptto raise out-of-home consump-tion through convenient packs and

pouches has also been successful. TheEuromonitor Report predicts thatBritannia is poised for tough compe-tition from ITC Foods, especially inthe premium and economy segments.The report states that ITCs offeringsare likely to succeed in both urbanand rural areas given its wide productmix, suitable pricing and availability.Sunfeast Golden Bakery and Spe-cial will pose greater competition forBritannia Indias Good Day brand ofcookies over the forecast period dueto their strong distribution reach andcomparatively lower pricing. Mean-

while, Britannia Tiger is expected toperform well, as mothers are expectedto purchase fortified products withhigher iron content for their growingchildren, it predicts.

The report also forecasts thatbiscuits are expected to providegreater competition to other snack-ing products, especially among theyouth consumer segment. There willbe greater morphing of categories,it mentions, with biscuit manufac-turers increasingly positioning their

products as sweet and savoury snain pouch formats, which can be elike chips/crisps. Aside from youoriented on-the-go snacking, th

will be more product launches inindulgence segment. Brands sucDark Fantasy, Treat and Good Das well as boutique cookies, will

well over the forecast periodsays.

Market analysts believe that wpremium segment growth willdriven by the launch of richer coies incorporating high-end ingr

ents, growth will also come frombottom-end of the pyramid in form of plain and savoury biscuit

That being said, the per uprice of biscuits is a crucial fafor the manufacturers. The recrise in the cost of raw materials

wheat flour, sugar, cocoa and edoils has put a number of small pers in a fix. The average unit pricebiscuits increased during year 202008, and are expected to contifor some time. Biscuit manufactuare thus bound to raise the pricetheir products, unless it is a natio

player like Britannia, Parle Prodor ITC Foods.

The economic scenario has pofurther challenges to the alrehighly competitive biscuits indtry. Smaller biscuit manufactuhave been sidelined further frommainstream, which is clearly donated by the three national maj

What still remains to be seewhich way the cookie crumbles nHopefully, it will crumble in mdirections and diversifications.

Premium segmentgrowth will bedriven by the launch

of richer cookiesincorporating high-end ingredients.

Danone offers high fibre crackers

under the Jacobs brand in India.

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Can the Cookie Crumble