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Indian BISCUIT INDUSTRY

By: PRASOON MISHRA MBAL 1020

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HISTORY OF BSCUIT INDUSTRY

Biscuits are a very significant part of the food industry in most countries of the world.

A biscuit is a small baked product; the exact meaning varies markedly in different parts of the world.

The origin of the word "biscuit" is from Latin which means "cooked twice" (similar to the German Zwieback).

Biscuit is most suited for local production. This factor alone has made India a big biscuit center. Biscuit Industry has flourished in India enormously over the years and is still growing phenomenally.

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FEDERATION OF BISCUIT MANUFACTIRE OF INDIA (FBMI)

FBMI, Established in 1950

It is the premier forum of the organized segment of the biscuit industry in India and

it consisting of small scale, medium and large biscuit manufacturers located in all zones and all States of the country

It is serving with the prime objective of protecting and promoting the interests and development of the Biscuit industry.

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FBMI as the apex body of the biscuit industry, the Federation striving with some objectives. The objectives are:-

To promote and protect the interest of the Biscuit manufacturing industry, particularly in the small and medium sector

To promote and develop a systematic and hygienic Biscuit manufacturing Industry

To promote research and product development for the biscuit manufacturing industry and the establishment of any research organization for the purpose same

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To assist the small and medium biscuit manufactures in the purchase of flour, inputs and other commodities and the provision for technical advice for improving manufacturing techniques and marketing method

To create appropriate bodies to advise Government of various aspects connected with the development of the biscuit manufacturing industry

To obtain Government authority rights, concessions which benefited biscuit manufactures.

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OVER VIEW OF THE INDIAN BUSCUIT INDUSTRY

Biscuit industry contribute Rs 8,000 crore to the FMCG industry and provide a vast opportunity for growth, per capita consumption of biscuits is 1.8 kg in our country but it is increasing day by day.

India Biscuits Industry came into limelight and started gaining a sound status in the later part of 20th century when the urbanized society called for ready made food products at a tenable cost.

Biscuits were assumed as sick-man's diet in earlier days.

Now, it has become one of the most loved fast food products for every age group. Biscuits are easy to carry, tasty to eat, cholesterol free and reasonable at cost.

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Maharashtra and West Bengal, the most industrially developed

states, hold the maximum amount of consumption of biscuits.

The rural sector consumes around 55 percent of the biscuits in the bakery products.

Apart from Big 3 ( Britannia ,Parle , ITC ) there are around 150 medium to small biscuit factory in India.

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Few years back, large scale bakery manufacturers like cadbury, nestle, and brooke bond tried to trade in the biscuit industry but couldn't hit the market because of the local companies that produced only biscuits.

The Federation of Biscuit Manufacturers of India (FBMI) has confirmed a bright future of India Biscuits Industry.

According to FBMI, a steady growth of 15 percent per annum in the next 10 years will be achieved by the biscuit industry of India.

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Two Sectors of Biscuit Industry In terms of volume biscuit production by the organized segment is

estimated at 1.30 million tones.

In the organized sector, the industry is dominated by Britannia and Parle, which account for 70 per cent of the industry's volumes.

The two major organized players are Britannia and Parle. Britannia’s market share stands at Rs 27 billion.

Parle derives a large portion of its revenues from low-priced biscuits. Infact , Britannia's market share in the medium and premium varieties is Significantly higher.

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Other organized players include

domestic players like Brakeman’s, Champion, Kwality, Priya and MNC’s like SmithKline Consumer, Sara, Heinz, Excelsia (Nestle) and United Biscuits.

The unorganized sector consists of small bakery units, cottage and household type manufacturing The goods distributing in the surrounding areas without good quality packaging.

Lower overhead cost due to limited local area, family management, focused product lines and less expenditure on marketing help the unorganized sector to grow.

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IMPORTANT BRANDS PITCHED AGAINST EACH OTHER OR PRODUCT COMPARISION

Category Britannia Parle Leader

Glucose Tiger Parle-G Parle –G

Marie Marie Gold Parle Marie Marie Gold

Salty snacks 50-50 Krack Jack Krack jack

Choco chips Good day Hide n seek Good day

Milk Milk bikis Milk sakhti Milk bikis

Bourbon Bourbon Hide n seek Bourbon

Nice Nice ----------------- Britannia Nice

Multi grain Nutri choice ------------------- Nutri choice

Cream Cream Treat Kreams Cream treats

Cookie Good day 20-20 Good day

So the battle for market share continues and advantage is for consumers who will get better product from both these biscuit majors .

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GROWTH OF THE INDUSTRYAfter 2005 India is - third largest producer of Biscuits in the

world, after the USA and China.

Annual growth of 14-15% .

Growth in biscuit marketing has been achieved due to improvement in rural market penetration.

According to the NCAER Study, biscuit is predominantly consumed by people from the lower levels of society

EXPORTS of Biscuit are estimated to be around 15% of the annual production during the year 2010-11 & IMPORTS of biscuits in India have not shown any significant growth 05/03/2023

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2005-06 2006-07 2007-08 2008-09 2009-10 2010-110

5

10

15

20

25PRODUCTION (In lakh metric tonnes)

14.2916.14

17.4418.25 19.1

16.57

YEAR

Annual Production:The organized biscuit manufacturing industry‘s annual production figures are given below:

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Based on the production in India biscuits can be broadly classified into:-

Source:- Indian Biscuit Manufacturers’ Association (IBMA)

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Industry Research

• Objective: To study eating habits with regards to consumption of biscuits amongst people.

• The composition of choices of food of people for breakfast and snacks shows that only 16% prefer biscuits.

Source:- Indian Biscuit Manufacturers’ Association (IBMA)

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Industry Research

• Of the people who consume biscuits 25% people prefer cream biscuits,

• 12% prefer wafer biscuits,• 34% prefer sweet plain

biscuits and• 29% of people prefer

namkeen or salty biscuits.

Source:- Indian Biscuit Manufacturers’ Association (IBMA)

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Industry Research• The number of people

who eat biscuits include 37% of people who eat them everyday,

• 29% eat twice a week, • 14% eat four times a week, • 8% eat once in 15 days, • 6% eat once in 10 days and

once in a month.

Source:- Indian Biscuit Manufacturers’ Association (IBMA)

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MARKETING OF BISCUT

Wholesale and Retail marketing in the Biscuit industry is carried out with a network of Dealers / Wholesalers and Retail shops

Market share data for Indian biscuit industry:Here are market share data for biscuit industry from report s available at IBMA ( Indian Biscuit Manufacturers Association)

Major Market Share Holders – Organized SectorINDUSTRY SHARE

PARLE 40%

BRITANNIA 38%

PRIYA GOLD 15%

ITC 11%

REST 6%

% OF MARKET SHARE BRAND WISE (VOLUME)

PARLEBRITANNIEPRIYA GOLDITCREST

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Market Share - Sector wise

ORGANISED SECTOR

UNORGANISED SECTOR

70% 30%

Market share penetration-Popln. wise

URBAN RURAL

85%-75% 65%-55%

Market share - Region wise: Market share of the industry in india as per region

ZONE % CONTRIBUTION

NORTH ZONE 25%

WEST ZONE 23%

EAST ZONE 28%

SOUTH ZONE 24%

Market Share – product wiseMarie and Glucose 50%sweet, crackers , cream ,milk

50%

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Marketing practices

Biscuits are consumed by people of all ages, from the rich to the poor, living in cities & in villages.

While some have it for breakfast, For others it is a complete wholesome meal For some it's the best accompaniment for tea, While for some it's a way of getting charged whenever they are low

on energy.

Biscuit industry practices mass marketing, which appeals to masses. Thus the industry adopted mass production, mass distribution and mass promotion of products for all buyers.

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Pricing mixBiscuit is a comparatively low margin food product in the PMCG

(Packaged Mass Consumption Goods) sector.

The commodity is also price sensitive,

Taxation has been a major deterrent in the growth of the biscuit industry

Most of the companies in the industry adopted the Market Penetration strategy i.e. low price along with capturing of a large market.

Also they focus on providing good quality products at the same time, which means it uses the value pricing method.

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The value-for-money positioning helps to generate large sales volumes for the products.

The biscuits industry now has two clear models. Parle products play the low price game at all varieties of biscuits from glucose to cream.

But Britannia and Sunfeast look at a two-pronged strategy. High margins in cream variants and high volumes for the Marie and Glucose segments.

For instance, cream biscuits from both Britannia and Sunfeast cost Rs 10 for 100 grams. Parle, however, only charges Rs 5 for its cream variants. Except for Hide & Seek, all of Parle’s products lie in the price range between Rs 4 and Rs 6 for 100 gram packs.

Cont…

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PackingThe packaging of bakery products is closely interlinked with

production, preservation, storage, transportation and marketing.

The importance of packaging is that It constitutes a fair portion 10 to 25% of the entire cost of the pack.

Its common sight now that retailers are keeping small packs of biscuit in Jar. Britannia as well as Parle s biscuits are now available in Jars and products priced in the range of Rs12/- Rs 15/- also.

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Promotion

Industry’s ability to connect to large population through various promotional events (such as school’s industry visits to plant, talk & TV shows, rural programs) to target different age segment will decide the market share.

Biscuits are available to consumers, even in the most remote places and in the smallest of villages with a population of just 1500.

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ADVERTISEMENTSThe products were advertised mainly through press ads. The

communication spoke about the basic benefits of energy and nutrition.

Good advertisement policies due to which people are motivated to buy their product at least once.

For instance, ITC has the advertisement about a child entering the cream world makes the children excited about the product leading to increase in sales.

In the year 1997, Parle-G sponsored the tele-serial of the Indian superhero Shaktimaan. That went on to become a huge success ITC typically follows a branding strategy under the umbrella name "Sunfeast". With multiple sub-brands created under this banner.

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Current market position of Britannia biscuits

INTRODUCTION

GROWTH

MATURITY

DECLINE

Time

Sales

TreatPure Magic

Little HeartsMarieNice

Good DayTiger

Nutri Choice

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Current market position of Parle biscuits

INTRODUCTION

GROWTH

MATURITY

DECLINE

Time

Sales

Hide & Seek Krackjack Parle gMonaco

Kreams

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StrengthsBrand building capabilities Diversified product range of the industry

covering all segments. The depth of distribution Low and mid price range of the products Industry catering to masses, as in most

developing economies, increasing purchasing power is aiding the shift to affordable options.

Weaknesses

Dependence on retailers and grocery stores for displaying diversified products on shelf.

Lack of technology up gradation

Threats

Fluctuations in the prices of raw materials, transportation costs & distribution

cost due to high wedges and oil prices, Entry of ITC (having very good

distribution channels) in to biscuit industry)

Emerging local bakery products.

Opportunities Per capita consumption of Biscuits in

India is only 1.8 kg Growing demand of Sugar free biscuits. IBMA estimates annual growth

of around 20% in next couple of years. The $220 Billion food industry is

expected to grow to $300 Billion by 2015.

A package of fiscal incentives provided by various State governments

SWOT

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Conclusion In Indian BISCUIT Industry even the small companies are able to

make profits.

Indian biscuit Industry has a continuous growth and will not be hindered due to external factors. Biscuit Industry has flourished in India enormously over the years and is still growing phenomenally

Entrepreneurs or businessmen who are in process of buying, installation of new biscuit line should keep following points in mind, apart from legal requirement of industrial licenses pollution clearance's and of course finance

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REFERENCES www.google.com www.mofi.nic.in www.fbmi.in www.economictimes.com www.yahoo.com www.britannia.com www.parle-producuts.in

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