Grocery

S U P E R M A R K E T

B U S I N E S S

Pricing, promotion and distribution

form the three pillars of the
impenetrable biscuits segment.

By Bhavya Misra

T
he Indian biscuits
industry has well
typified the knack of
importing a foreign
idea and customis-
ing it to the needs of the domestic
environment. In a segment over
a hundred years old with more
than 60 incumbents, the chunk of
market share is held by just three
brands. So, what is the future of
competition in the Indian biscuit
category?
The biscuit sector of India is that year happened to be 1.4 per- The respective company shares in a rally race between the players for
amongst those few, which are rep- cent. While ITC’s share increased the biscuits industry for Britannia, the consumers’ pockets, it cannot be
resentative of a monopolistic com- to 2.4 percent in 2004, that of Parle Parle and ITC, for the year 2007, as denied that they are well being tested
petition put up by a troika of three dropped to 33.5 percent and that of per Euromonitor International esti- for their salt, even if the competition
large companies competing not only Britannia saw a minuscule increase mates, stood at 34.8 percent, 32.0 continues to stiffen.
against others, but also amongst each of 0.3 percent, to 35 percent. The percent and 8.8 percent respectively. Penetration of branded biscuits
other. When ITC launched biscuits equilibrium set between the-then While the three brands constitute a has been intensifying, the share of
in the year 2003, the share of Bri- top two brands Britannia and Parle whopping 75.6 percent share of the the unorganised biscuits sector is fast
tannia and Parle, according to the further dwindled to a minute de- total market, the rest of 23.2 percent being eroded by the national brands.
Euromonitor International report crease in their shares to 34.1 percent space is acquired by multifarious re- It goes without saying that the na-
‘Biscuits in India,’ released in August and 32.8 percent respectively in the gional players and a 1.2 percent share tional brands have invested in plenty
2008, was 34.7 percent and 34.2 year 2005, while that of ITC shot up is held by just-emerging private label of groundwork to make the cookie
percent respectively. ITC’s share in to 5.2 percent. players. Although the figures indicate crumble their way.

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 Britannia, which has been pres-
ent on the Indian turf since 1892,
has tread very gingerly on the road
to brand success. The more-than-
hundred-years-old company has
constantly been adapting itself to the
demands of the consumers and the
market. For the year ending March
2008, biscuits, Britannia’s core busi-
ness, reportedly accounted for 90
percent of the company’s net sales,
contributing a staggering USD 650
million.
In September 2008, Britannia was
included in the list of eight examples
of ‘Creative capitalism’ published in
Time magazine. The product portfo-
lio of Britannia biscuits includes ten
brands, namely, Tiger, Good Day,
50-50, Britannia Marie Gold, Treat,
Nutri Choice, Little hearts, Milk
Bikis, Time Pass Nimkee and Nice
Time. The brands are strategically
positioned to make consumers iden-
tify with them in their daily lives.
Communicative branding
Britannia: Tiger biscuits, launched
in the year 1997, have become the
mass-market face of Britannia, and
also the largest selling brand in Bri-
tannia’s biscuit basket along with
Britannia Good Day. Tiger biscuits
are positioned for modern mothers
who are on the lookout for the best
energy products for their children
in a competitive world. Tiger glu-
cose biscuits have been fortified with
‘Iron Zor’ with an attempt to address
the Iron-deficiency crisis many In-
dian children face. In recent times,
the Tiger biscuits’ portfolio has also
been extended to comprise four vari-
ants – Tiger Coconut, Tiger Creams,
Chota Tiger, Tiger Banana and Iron
Zor.
In sync with their strategy of cal-
culated innovation, Britannia had
launched Tiger Coconut, coconut
flavoured energy biscuits, in the year
2001. This was followed by Tiger
Creams, which were introduced in
the year 2002, in a number of fla-
vours such as Orange, Elaichi, Choc-
olate, Pineapple, Strawberry and
Butterscotch. Chota Tiger, which
was launched in 2007 as an exten-
sion of the Tiger glucose biscuits, is a
mini-sized poppable glucose biscuit
with coloured sugar sprinkling and is
offered in two variants – Milk Spar-
kies and Choco Sparkies.
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Britannia Good Day, which was
launched earlier than Tiger biscuits,
in the year 1986, has also made its
place as one of Britannia’s largest sell-
ing biscuit brands. Good Day bis-
cuits were launched in two flavours,
Cashew and Butter. Consequently in
1989, Good Day Pista Badam was
launched, followed by Good Day
Chocochips in the year 2000 and
Good Day Choconut in 2004. The
brand 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 launched
in the year 1993. This sub-brand
has also met with considerable suc-
cess, becoming the market leader in
the crackers category. 50-50 crackers
are targeted at young consumers; the
brand has been promoted on a ‘fun’
plank. In 2001, the ‘Maska Chas-
ka’ variant of 50-50 crackers was
launched to resounding success.
The Marie Gold sub-brand is the
oldest in Britannia’s portfolio, span-
ning nearly fifty years. The brand is
among the six ‘Pillar’ brands of Bri-
tannia, the others being Tiger, 50-
50, Good Day, Treat and Milk Bikis.
Marie Gold biscuits fall under the
category of the traditional tea-time
biscuits.
Launched in the year 2002, Bri-
tannia Treat is the umbrella brand
for all the cream-filled offerings
from the company. The biscuits are
again targetted at kids, and come
in varied flavours such as the classic
Bourbon and Elaichi, fruit-flavoured
Creams such as Orange, Pineapple,
Mango, and Strawberry; the Jim Jam
range (jam-filled biscuits) and, the
Duet range, which are biscuits with
two flavours of cream filled between
three layers of biscuit. Two vari-
ants – Strawberry Vanilla and Duet
Strawberry Chocolate – are offered
under this sub-range. Under the
Treat Brand, Britannia also launched
‘Fruit Rollz in the year 2006. Fruit
Rollz extend beyond the cream bis-
cuit range and are soft rolls filled with
the essence of real fruits providing a
healthy yet scrumptious treat for
children. Another interesting variant
in the Treat range is the Treat Choco
Gello, which was launched nation-
ally in August 2007 and propagated
the slogan, ‘Double masti ka double
dose.’ Treat Choco Gello is a combi-
nation of chocolate and caramel in a
single bar.
The Treat sub-brand features
the ‘Funtoosh’ character as its brand
mascot. Funtoosh is a guy who sym-
bolises mischief and fun, and accord-
ing to Britannia, he will pull off any
trick to make sure he gets to eat his
Britannia Treat!
Milk Bikis by Britannia pro-
moted the idea of ‘Eating milk’ in
a yummy way. The brand became
popular with Indian mothers, as it
replicated milk’s benefit as a source
of energy for growing children. Hav-
ing established considerable loyalty
for itself, the Milk Bikis brand came
up with a new variant, Milk Cream,
in the year 1996. These round Milk
Cream biscuits come with smiley
faces and are laden with milk cream
to appeal especially to children. In
the year 2006, Britannia renovated
Milk Bikis by adding what it called
‘Development Fuel’ to the product.
These new Milk Bikis come in an in-
teresting honeycomb design and an
enhanced product experience being
fortified with so-called ‘Smart Nu-
trients’ such as iodine, iron and the
four vital vitamins.
Britannia broadened its focus of
target consumers from children to
adults with the launch of the Bri-
tannia Nutri Choice range
in 1998. The range com-
prises three variants – Nu-
triChoice Thin Arrowroot,
NutriChoice Cream Cracker
and NutriChoice Digestive.
NutriChoice Thin Arrow-
root contains the benefits of
arrowroot, which aids diges-
tion and removes harmful
toxins from the body. Prior
to 1998 it was being market-
ed as Britannia Jacob’s Thin.
NutriChoice Cream
Crackers have a neutral taste
and are propagated with the
statement, ‘As nature would
have wanted it to be.’ Nu-
triChoice digestive biscuits are
made with 50 percent whole-
wheat and packed with added
fibre, which meets ten per-
cent of one’s daily fibre needs. Nu-
triChoice Sugar Out was launched in
the year 2007, and has the USP of
no added sugar, despite the product
tasting sweet. It is sweetened with
“Sucralose,” derived from sugar,
which provides the same sweetness as
any other biscuit, without the added
calories of sugar.
The newest variant of Britan-
nia NutriChoice happens to be the
NutriChoice 5 grain biscuits, which
are made from five healthy cere-
als – Oats, Corn, Ragi, Rice, and
Wheat. The biscuits are sweetened
with natural honey, and also come
in a convenient packaging contain-
ing several small single-serve pocket
meals packs, making it easier for out-
of-home consumption.
The other biscuit brands that
have reflected Britannia’s hallmark
of innovation are Britannia Nice
Time, Britannia Time Pass and Bri-
tannia Little Hearts. Little Hearts
was launched in the year 1993 and
is targeted at the youth segment.
This was the first time biscuits were
retailed in pouch packs like potato
wafers. The product was supported
with launch messages, which ac-
cording to Britannia, could melt the
hearts of even characters like Dracula
and Frankenstein. Four years later, in
the year 1997, the company let loose
an ad campaign that encouraged
youngsters to openly express their
feelings. The campaign was called,
“Direct dill se.” Subsequently, in the
year 2003, two variants called Little
Britannia has consciously pro-
moted its products on a health
plank, while broadening focus to
include young and adult consum-
ers alike.
• PROGRESSIVE GROCER • 77

Hearts Chocolate and Little Hearts
Sesame were rolled out with a cam-
paign “Dil sabka actually sweet hai.”
Britannia’s Nice Time biscuits
pioneered sugar-sprinkled biscuits
in 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. Before
Timepass, Snax was Britannia’s of-
fering in the salted snacks category.
The same was revamped as a lighter
product and renamed as Britannia
Timepass Classic Salted. The Nim-
kee variant in Timepass brand was
launched in the eastern market and
subsequently expanded nationwide.
Parle Products: Succeeding Bri-
tannia was Parle Products Pvt Ltd,
which emerged in the year 1929
with a small manufacturing facility
in Mumbai producing sweets and
toffees. A decade later, in 1939, the
manufacturing facility was upgraded
to manufacture biscuits. Manish
Mishra, zonal sales manager, Parle
Products Pvt Ltd. says, “Before set-
ting up the manufacturing facil-
ity at Ville Parle in Mumbai, one of
the-then directors of the company,
Narottam Chauhan, visited a num-
ber of countries abroad and gained
substantial technical knowledge and
feedback on the manufacture of bis-
cuits. We thus began, initially, with
the manufacture of Marie biscuits
and then moved on to the Parle G
glucose biscuits.”
The Parle Products’ basket of
biscuits comprises well entrenched
brands such as Parle G, Krackjack,
Krackjack Crispy Creams, Monaco,
Kreams, Hide N Seek, Hide N Seek
Milano, Parle Digestive Marie, Parle
Marie, Milk Shakti, Parle 20-20
Cookies and Nimkin. With twelve
biscuit brands in its portfolio, Parle
Products has been able to maintain
a tight stronghold on the biscuits
market. Parle G is now over 65 years
old, and is also the brand that caters
to the mass market segment of Parle
Britannia extended the Treat brand with
Treat Rollz.
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Products. With the ‘G’ in Parle G in-
dicating ‘Genius,’ Parle G has been
targeted as an healthy snack with the
benefits of milk and wheat and thus
claims to be, “Hindustan ki Taaqat.”
The sweet and salty Parle Krack-
jack, launched in the year 1972, is
claimed to be the world’s first sweet
and salty biscuit range. Symbolic of
capturing the tastes of relationships
in a biscuit, they are positioned with
the statement, “It’s not just a biscuit,
it’s the taste of relationships captured
in a biscuit.”
Instilling the desire among con-
sumers to add ‘a pinch of salt’ to
their lives were the Parle Monaco
salted biscuits. The biscuits aim to
add a twist to life’s 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 Britannia’s Milk Bikis,
it is fortified with the health benefits
of milk and honey, thus intending to
transform kids, the prime target seg-
ment, from being boy-next-door to
super boys. Parle Nimkin, according
to Parle Products, are crispy crack-
ers that add zing to usual biscuits.
It has been positioned for anytime
consumption, be it with tea, evening
snacks or to salt up the thoughts in a
daily routine.
In the cream biscuits segment,
Parle Products has launched Parle
Orange Kream biscuits, which seek
to tickle the taste buds with tangy
orange cream between two layers of
biscuits. The biscuits are targeted at
all age segments. Parle Marie biscuits
are targeted for pass time consump-
tion with the slogan, “Batcheet bak-
bak aur Parle Marie”. Until last year,
Parle Marie biscuits were known as
Parle Marie Choice, and have been
re-launched as Parle Marie biscuits,
currently being aggressively promot-
ed with commercials.
Biscuits have a
high penetration in
geographies where
tea is a preferred
beverage.
The “Digestive Marie sahi Ma-
rie” biscuits claim to be authentic
Marie biscuits that change consum-
ers’ daily sipping and dipping habits.
They have, according to Parle Prod-
ucts, five times more fibre than the
regular Marie. With lower fat and
calories than other digestive biscuits,
Digestive Marie claims to help one
stay active and lightfooted all day.
Hide & Seek biscuits, the premium
segment offering by Parle Products,
are chocolate biscuits with embed-
ded chocolate chips. They are pro-
moted with the tagline, “Tasty itna
ke dil aa jaye.”
Parle Products’ foray into the
cookies segment is typified by the
Hide & Seek Milano cookies. As they
say, “There’s a secret behind every
Milano,” the ingredients of the Hide
& Seek Milano cookies are a well-
guarded secret. The cookies are posi-
tioned to identify themselves with an
element of romance. Another recent
offering from Parle Products for the
high-end segment is the Parle 20-20
cookies. The cookies come in two
flavours – Cashew and Butter.
ITC Foods: ITC Foods, the
youngest child in the national bis-
cuits brand family, forayed in the
year 2003 with the Sunfeast range
of glucose, marie and cream biscuits.
ITC Foods has used its phenomenal distribution network to stake a
claim in the Rs 8,000-crore biscuit market.
With their consistently rising share of
the biscuits market, the company has
already invited the ire of pre-existing
competitors. A well carved out strat-
egy from the outset has made ITC
a formidable player in the biscuits
industry as well. Chitranjan Dar,
COO, ITC Foods, remarks, “The
biscuits market is a large national
market. And, the foods segment is
one of the largest categories. Thus,
with our distribution strength across
India, it is a very natural market for
us to be in.”
“It has also the ingredients of a
good FMCG one can build brands
on over years and distribute it, cou-
pled with the fact that there is a lot of
manufacturing expertise in ITC.”
‘Sunfeast’, the biscuits brand
from ITC Foods, spills out its brand
essence, ‘Spread the smile,’ with a
clearly identifiable brand mascot,
‘Sunny., whose essence connotes
happiness, contentment, satisfac-
tion and pleasure, and reinforces the
brand’s emotional aspects.
ITC Foods’ offering in the ma-
rie segment of biscuits was the ‘or-
ange flavoured marie,’ indicating the
company’s product innovation ef-
forts from the start. Treading differ-
ently on the known roads to success,
ITC Foods came out with eight fla-
vours in the cream biscuits segment
and the Sunfeast range of glucose

biscuits, the three largest selling bis-
cuit varieties in India.
For the premium segment, ITC
Foods came out with ‘Sunfeast Dark
Fantasy’, a dark chocolate with vanil-
la cream offering, in select markets.
Consequently, ITC Foods also came
out with milk biscuits under the
sub-brand ‘Sunfeast Milky Magic’
in the general milk and milk cream
category. In recent years, ITC Foods
has enhanced its biscuits portfolio to
include salted crackers and cookies.
The Sunfeast Snacky salted crackers
are present in two variants – Chilli
Flakes and Classic Salted.
Simultaneously, ITC Foods has
not offered any leeway to consumers
to slip out of Sunfeast’s stranglehold
by launching the ‘Sunfeast Special’
cookie range, which is also avail-
able in select markets. The Sunfeast
Special range currently includes
cookies in three variants – Butter,
Cashew and crunchy Coconut, as
well as cream biscuits in two variants
– Choco and Orange. The recently
launched Sunfeast Golden Bakery
also offer the freshly baked taste of
cookies in three variants – Choco-
nut, Butter-nut and Butterscotch.
Sunfeast Nice is ITC Foods’ chal-
lenge to Britannia’s Nice Time sugar-
sprinkled biscuits.
The successful penetration of
Sunfeast has been encouraging
enough for ITC to extend the brand
name to other products like pastas.
The pasta segment was further ex-
panded with the launch of ‘Sunfeast
Benne Vita.’ The ‘Sunfeast Benne
Vita’ range was enhanced further,
with the launch of Sunfeast Benne
Vita Flax Seed biscuits that reflected
the brand essence of Benne Vita,
which in Italian stands for ‘Good
Life.’ The flaxseed content in these
protein and mineral enriched bis-
cuits, according to ITC Foods, is a
rich vegetarian source of Omega 3.
Continuing its focus on the health
segment, Sunfeast extended the bis-
cuits portfolio to the nutritional seg-
ment with the launch of Sunfeast
Sachin’s Fit Kit – a range of healthy
products co-created with Sachin
Tendulkar. It was for the first time in
India, according to ITC Foods, that
an icon of the stature of Sachin Ten-
dulkar was actively involved in the
product development process, as co-
creator of the Sunfeast Sachin’s Fit
Kit range. Sunfeast shares the vision
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with Sachin Tendulkar to enable the
products under Sunfeast Sachin’s Fit
Kit range in creating “Champions of
Tomorrow.” The launch range com-
prises two offerings – Sunfeast Sa-
chin’s Vitamin and Protein enriched
biscuits and Sunfeast Sachin’s Multi-
grain biscuits.
Local bites
Having talked about the national
brands, there are a number of region-
al brands in the country also who
enjoy a strong local foothold in their
markets of presence. Parle Products’
Mishra informs, “After Britannia and
ITC, there are three regional players
in the eastern part of India – Bisk
Farm, Raja Biscuits and Bhagwati
biscuits – that dominate the market.
As far as Parle Products is concerned,
it stands at the sixth position in east-
ern India, following the two national
and the three regional brands.” In the
states of south India like Karnataka,
Mishra informs that Parle Products
is the market leader.
“In Tamil Nadu, Britannia stands
at number one position and at the
second position is Parle Products,
while in Kerala, our market pie is in
the 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 and
Rajasthan we are the clear leaders,”
Mishra adds.
The Euromonitor International
report also elucidates the individual
market shares of a few leading re-
gional biscuit brands in India. Saj
Industries, which own the Bisk Farm
brand, occupies a market share of 1.2
percent, which is a little lower than
what Surya Foods Private Limited,
the owners of the ‘Priyagold Biscuits’
brand, holds. The share of Priyagold
Biscuits stands at 1.5 percent, a fig-
ure that, according to Euromonitor
International, has remained stagnant
since 2005. Surya Foods’ Priyagold
biscuits have presence in states such
as, Delhi, Uttar Pradesh, Haryana,
Punjab and Rajasthan. While Surya
Foods started manufacturing Priya-
gold biscuits in the year 1992, Bisk
Farm jumped onto the bandwagon
in the year 2000, and quickly posted
an impressive growth rate over its
predecessor. However, the share of
Bisk Farm biscuits went down to
1.2 percent in the year 2007, from
Product offerings
from regional and
national brands are
often quite similar,
though they differ in
market penetration.
its previous share of 1.4 percent in
year 2004 across 2006. The product
portfolio of Bisk Farm and Priyagold
biscuits comprises almost similar bis-
cuit categories like crackers, cream
biscuits, maries, cookies and others.
According to B. P. Agarwala, CMD,
Surya Foods & Agro Ltd., the jour-
ney of Priyagold Biscuits has not been
easy as there was the huge challenge
of establishing a strong consumer
preference for Surya products despite
serious competition from established
players in the market.”
“Our strong brand building and
distribution capabilities have enabled
us to establish a sizable market share
for our products. Priyagold has seen
a tremendous growth in the past 15
years and, we are growing at a rate
of 20-25 percent(average) per year,”
he adds.
Another prominent player in the
biscuits market in India is the Aus-
tralian speciality cookie major, Un-
ibic, which entered India in the year
2005. The speciality cookie major
is present in India with its brands
Anzac biscuits and Bradman, and
Unibic biscuits are now omnipresent across modern and traditional
grocery retail channels.
has been expanding its geographical
presence in a phased manner. While
Unibic products are retailed at all
leading supermarket chains and tra-
ditional grocery stores, it has been
slow on aggressive brand promotion.
Perhaps because it was legally chal-
lenged by Britannia against a Unibic
commercial that had the tagline,
“Why have a good day when you
can have a great day?” The commer-
cial directly pitted Unibic against
Britannia’s top performing brand
Good Day, and eventually lost to the
latter in the lawsuit. Unibic biscuits
cater to the high-end segment and
have been very low key on promo-
tional activities, despite the fact that
brand loyalty does not exist in the
biscuits segment, and that, provid-
ed right product and promotion, a
large share of the consumer segment
can be drawn in.
While the product offerings from
regional and national brands have
been quite similar, what becomes im-
portant is to analyse the factors that
have been contributing to growth in
the category.
• PROGRESSIVE GROCER • 79
Necessity becomes the anytime snacks and stipulates two
mother of consumption reasons for the trend. “Keeping in
mind the fact that a substantial per-
The Euromonitor International centage of Indian population stays in
report speaks of a consumption tran- rural and semi-urban areas, biscuits,
sition that biscuits have gone through because of their economic pricing,
in recent years. The report states, become the most affordable snacks
“Biscuits in India have evolved from for this segment. For the high-end
being just tea-time snacks to snacks segment also, the affordability fac-
that can be eaten at any time of the tor and the hygiene and convenience
day. With modern Indian consumers that biscuits offer, become a driving
leading increasingly busy lifestyles, force,” he elaborates.
there has been a disintegration of “For high-end consumers, bis-
proper meal times, and most con- cuits are a preference at occasions
sumers now consume several small that may vary from tea-time snack-
meals through the day rather than ing to business meetings to family get
three square meals, as was the case a togethers to travelling and such.”
generation ago. As a result, snacking The Euromonitor report corrob-
products in general, and biscuits in orates this view, confirming that “the
particular, see growing demand.” rapid rise in consumerism in semi-
“In general, biscuits are perceived urban and rural areas has favoured
to be nourishing and healthier than the growth of premium indulgence
other snack products such as choco- products such as filled biscuits”.
late confectionery, ice cream and Samar Singh Sheikhawat, VP,
sweet and savoury snacks, leading to marketing of Spencer’s Retail, which
a double-digit growth in both vol- retails the extremely successful private
ume and value terms in 2008.” label Spencer’s Smart Choice cookies,
The report informs that the bis- states, “Biscuits have high penetra-
cuits industry in India acquired a tion in the geographies where tea is a
value worth Rs 71 billion in 2008, preferred beverage (northern, western
growing at a rate of 15 percent in and eastern India). It has a tea-time
current value terms. It further states, connect, and the communications
“The growth in biscuits stems from done to build the category tradition-
both the economy and the premium ally aimed at tea-time connections.
segments, with plain biscuits and For the balance of the geography –
savoury biscuits being consumed savories are preferred, price point be-
by consumers in the lower-middle ing the decision maker for purchase.
income segments, and sandwich bis- Also the ease of finger snacking has
cuits and cookies being increasingly worked to its advantage.”
consumed by middle- and upper- Sheikhawat informs that biscuits
middle-income consumers.” contribute six percent of the total
Parle’s Mishra corroborates
the fact that biscuits have become
Spencer’s Smart Choice cookies are
priced at least ten percent lower than
the market leader.
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FMCG sales at Spencer’s stores. Fur-
ther elaborating upon the reasons that
motivated the retailer to foray into the
cookies segment, Sheikhawat states,
“Packaged cookies as a sub-segment
of FMCG biscuits in our country has
had low penetration and as such the
strategy in this case is that of increas-
ing penetration for packaged cookies.
This has also been a case of category
building exercise, through differenti-
ation in flavour profile and ‘value for
money’ price points.”
The pricing game
The ubiquitous presence of bis-
cuits is a consequence of a number
of causal factors. The snack, which
has a per capita consumption of 1.8
kg only in India, as compared to the
2.5-5.5 kg per capita consumption
in Europe and USA, has had an ex-
tremely wide penetration owing to
the efforts of market leaders such as
Britannia, Parle Products and ITC
and 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 also
extremely fragmented with a sub-
stantial proportion of sales account-
ed for by the unorganised sector. In
such a competitive scenario, biscuits
become highly price sensitive. There
is a fairly high possibility of the de-
mand for a particular brand dipping,
if it attempts to move up the price
ladder in its biscuits portfolio. This is
also because brand loyalty in biscuits
sector happens to be frail.
“Fundamentally, the biscuits in-
dustry is not as price sensitive as it
is made out to be. Competition is
what makes it price sensitive. If there
is competition there will be a price
benchmark along with an image
benchmark which a consumer will
see and decide, as to what he values
more and what he values less,” ITC’s
dar states.
A typical biscuit portfolio of a
company straddles across the econ-
omy and the high-end consumer
segment. Thus, while Parle G, Ti-
ger Glucose and Sunfeast Glucose
biscuits cater to the price-sensitive
masses, Parle Hide & Seek, Sunfeast
Dark Fantasy and Britannia Good
Day cookies address the higher-end
consumer segment. Mishra remarks,
“As far as the glucose biscuits catego-
ry is concerned, none of the compa-
nies in India have raised their MRPs
for many years. We at Parle Products
have not increased the MRP of Par-
le G biscuits over the last 12 years,
though we have reduced the gram-
mages.”
“Glucose biscuit brands are based
on the value-for-money concept,
while the premium brands being ca-
tered to the high-end consumers do
not have such a price limitation. The
consumers of premium biscuits do
not bother too much about the pric-
es. Hence, in the premium biscuits
category, we raise the prices, but do
not reduce the grammages.”
While Parle Products is primar-
ily an economy segment player,
ITC Foods with its economy brand
‘Special’ and premium brand, ‘Dark
Fantasy’ echoes Britannia’s strategy
of having different brands at differ-
ent price points to cover all segments
in biscuits. Thus, while Britannia
offers Pure Magic at the premium
end, ITC matches up with the Dark
Fantasy brand. At a standard level
both have flagship brands – Britan-
nia Treat and ITC Sunfeast – while
Britannia Tiger and Special serve
the economy segment. This ensures
both bottom- and top-line growth,
with both volume and value growth
attained from different segments.
As for the private label players
that currently account for a share of
one percent in the total market, the
wide reach of unorganised produc-
tion in the form of bakeries that sell
biscuits at a discount to brands, be-
comes a limiting factor. About Spen-
cer’s pricing strategy, Sheikhawat
informs, “Spencer’s Smart Choice
products are priced at least 10 per-
cent less than the market leader and
are promoted at par or more. The
sensorial appeal of our products is at
least as good as the market leader.”
Cracking the market
For now, the Indian biscuits
market appears to be a tough nut to
crack. Even as Britannia and Parle
Products were still busy gauging the
market trends and catering to them,
ITC Foods jumped the wagon with
innovative and aggressively promot-
ed biscuit brands. The launch of its
economy brand, ‘Special’ was low-
key, but the distribution strength of
the parent company, ITC Ltd., en-
sured phenomenal reach and place-
ment.
ITC Foods also raised its adver-
tising spend in order to popularise
the new products. The publicity
strategy of ITC Foods has hinged
round television advertising; the
company has also used some of the
best known faces from cinema and
cricket to promote its brands. It has
been balancing television advertising
with print and outdoor media as well
as point of purchase (POP) materials
and promotions.
Britannia, on the other hand,
has been on an even keel in terms of
advertising spends, while Parle Prod-
ucts, which has maintained a low
profile on the advertising front, of
late, has also increased its advertising
spend by making use of celebrities to
create mass appeal for its brands.
Assessing the competitive sce-
nario in the biscuits industry in In-
dia, Mishra states, “If we gauge the
Danone offers high fibre crackers
under the Jacob’s brand in India.
WWW.PROGRESSIVEGROCER.COM AHEAD OF WHAT’S NEXT MARCH 2009
competition, it varies across different
categories of biscuits. In the pre-
mium biscuits segment, Britannia
is dominating with the Pure Magic
brand, but in the mass segment,
Parle Products is the dominating
company. The ‘Marie Gold’ brand of
Britannia is holding a market share
of 65 percent in its category. As for
ITC Foods, my belief is that they are
struggling to enhance market share.
The expenditure incurred by ITC
Foods on promotion of their biscuits
is something that no other player has
exercised, and this strategy may be
affecting their bottom lines.”
“When ITC entered the biscuits
segment, they directly competed with
Britannia and not Parle Products.
Their strategy has been to acquire a
part of the Tiger biscuits’ share.”
Dar remarks, “If we’ve got a
share, obviously we’ve pulled it from
somebody.However, more important
is the fact that the industry is not
static, it’s growing, and consequent
to this growth is the fact
that there is a large share of
the pie that everybody can
benefit from.”
“There is a certain share
dilution, which will hap-
pen with aggressive nuclear
coming in, but at the same
time the industry is grow-
ing and as long as there is
growth, there will be place
for all,” he points out.
On the role of market-
ing for ITC Foods’ biscuits,
Dar states, “Advertising
and promotion is a com-
bination between creating
pull and delivering value.
If you’re a national player,
obviously, you’d like to
be known nationally, and
therefore, to that extent,
marketing and promotion
become crucial.”
Remarking on the
competition scenario in
the biscuits segment, Su-
nil Awatramani, manag-
ing director, Diat Foods
comments, “Competition
in the biscuits segment is
very stiff. And I believe it
is going to stay like that.”
Diat Foods manufactures dia-
betic foods such as sugar free cook-
ies, cakes and chocolates. Its brand
‘Sugarless Bliss’ has already become
Premium segment
growth will be
driven by the launch
of richer cookies
incorporating high-
end ingredients.
a rage among health-conscious con-
sumers in India.
Even as ITC Foods on the one
hand continue to wage a war of sorts
in the biscuits industry, Britannia
has flexed its muscles to reach out to
a broader target segment. A greater
concentration on innovation in prod-
ucts targeted at the youth, reflected
in different product formats and
packaging of Britannia’s products is
already evident. Britannia’s attempt
to raise out-of-home consump-
tion through convenient packs and
pouches has also been successful. The
Euromonitor Report predicts that
Britannia is poised for tough compe-
tition from ITC Foods, especially in
the premium and economy segments.
The report states that ITC’s offerings
are likely to succeed in both urban
and rural areas given its wide product
mix, suitable pricing and availability.
“Sunfeast Golden Bakery and Spe-
cial will pose greater competition for
Britannia India’s Good Day brand of
cookies over the forecast period due
to their strong distribution reach and
comparatively lower pricing. Mean-
while, Britannia Tiger is expected to
perform well, as mothers are expected
to purchase fortified products with
higher iron content for their growing
children,” it predicts.
The report also forecasts that
biscuits are expected to provide
greater competition to other snack-
ing products, especially among the
youth consumer segment. There will
be greater morphing of categories,
it mentions, with biscuit manufac-
turers increasingly positioning their
products as sweet and savoury snacks
in pouch formats, which can be eaten
like chips/crisps. “Aside from youth-
oriented on-the-go snacking, there
will be more product launches in the
indulgence segment. Brands such as
Dark Fantasy, Treat and Good Day,
as well as boutique cookies, will do
well over the forecast period,” it
says.
Market analysts believe that while
premium segment growth will be
driven by the launch of richer cook-
ies incorporating high-end ingredi-
ents, growth will also come from the
bottom-end of the pyramid in the
form of plain and savoury biscuits.
That being said, the per unit
price of biscuits is a crucial factor
for the manufacturers. The recent
rise in the cost of raw materials like
wheat flour, sugar, cocoa and edible
oils has put a number of small play-
ers in a fix. The average unit prices of
biscuits increased during year 2007-
2008, and are expected to continue
for some time. Biscuit manufacturers
are thus bound to raise the prices of
their products, unless it is a national
player like Britannia, Parle Products
or ITC Foods.
The economic scenario has posed
further challenges to the already
highly competitive biscuits indus-
try. Smaller biscuit manufacturers
have been sidelined further from the
mainstream, which is clearly domi-
nated by the three national majors.
What still remains to be seen is
which way the cookie crumbles now.
Hopefully, it will crumble in many
directions and diversifications. n
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