Biscuit industry contributes Rs.3,000 crore to government's exchequer annually

Mondelez India has launched Bournvita Biscuits into new variants, Banana and Oats. Bournvita Biscuits’ Banana & Oats variant is available in two packs, while one is priced at Rs 10, the other is priced at Rs 25.

Sudhanshu Nagpal, Associate Director, Marketing (biscuits), Mondelez India, said, “The morning snacking occasion, has a huge opportunity for a product that brings together taste and nutrition which consumers want. And Bournvita Biscuits has successfully managed to tap into this consumer need, since its launch in 2016.”

“With the launch of Bournvita Biscuits, Banana and Oats, we are providing one more choice to our consumers by combining the goodness of banana and oats with a yummy, crunchy cookie from Bournvita – a brand Indian consumers have trusted for more than seven decades,” he added.

Nagpal further stated, “We are confident that the new Bournvita Biscuits - Banana and Oats will strengthen our presence as India’s subah ka biscuit.”

Hershey India, a part of The Hershey Company, has introduced Sofit Protein Cookies, marking its entry into the premium 'Better for You' segment in the biscuits category.

These cookies will be available in three variants like natural cocoa with flax seeds, mango with real almond bits, and raisins with flax seeds in premium packs. The 100g pack will be priced at Rs 45 while the 150g pack will be priced at Rs 65.

Herjit Bhalla, Managing Director, Hershey India said, "It is a unique proposition. We believe Sofit cookies are different from others because they have the goodness of protein, Omega-3, fibre and vitamins and are made from multi-grains, including wheat, oats and soy. They are trans-fat-free and contain no maida."

"Bringing a unique and consumer-relevant product such as a cookie with the goodness of protein into the $2.8-billion biscuit category is a perfect next step for the Sofit brand. Sofit is well regarded among consumers as a brand that provides protein and other nutrients. Sofit Protein Cookies makes it easy and convenient to have a crunchilicious snack that is better for you," he added.

The homegrown leading bread and biscuits maker Bonn Group has decided to foray into fast food restaurants business with the launch of its brand burger outlet chain La Americana.

The Ludhiana-based company operates outlets in Delhi and plans to expand the chain across many states in the next 12-18 months.

The market for the fast food business in India is currently pegged at around Rs 8,000 crore and growing at a sizzling pace of 30 percent CAGR.

“The outlets we have started in Delhi are getting very good response from the people as the taste of the burgers is very different. We will replicate the success of these outlets in others. We are confident people will love our American style burgers in other cities too. The thrust is one healthy eating and we have only fresh buns being served in the outlets,” said Amrinder Singh, Director, Bonn Group of Industries.

The outlets will also offer different types of vegetarian and non-vegetarian wraps, mojitos, iced teas, shakes, and fries. 

 “The market for fast food is growing at a very fast in India and since we are already recognized for the best of the breads and buns, we can use our long legacy in a related new business where we use our own buns for fresh burgers. The response we have got from our outlets in Delhi proves our entry into this business is right and going to be very exciting. What we are also doing with La Americana chain is that we are offering a whole range of eatables and beverages which makes us stand out from other burger chains” said Amrinder Singh said while commenting on the need to get into fast food business by the Ludhiana-based company.

The company already has a very good stronghold in Punjab, Haryana, Delhi, Himachal and Jammu & Kashmir for its other products like breads, biscuits, and cakes and will expand its fast-food business in these states before entering new geographies. 

The company has also launched La Americana range of gourmet cookies. These are premium cookies that are being sold in most North Indian cities and the new range has seen the overwhelming response from the customers.

Biscuits and confectionery maker Parle Products is planning to increase the prices of its glucose, Marie and milk biscuits by 4-5 per cent in the first quarter of 2018.

Parle Products Category Head Mayank Shah said “As of now, we have not taken any price hike (decision) but we would be thinking of a price hike considering the increased taxes. It will happen in the first quarter of next year, which is January-March. There might be an increase of 4-5 per cent in the price in brands which are below Rs 100 per kg. For mass (category) earlier we were taxed at a lower rate and now we are taxed at a higher rate, so there has been an impact there and they (mass offerings) have suffered a bit. Growth has been slow in the biscuit below Rs 100 per kg category at 6-7 per cent, compared to the industry growth of 14-15 per cent. Biscuits have been able to overcome both demonetisation and GST. Biscuits which were earlier taxed at a higher rate and now have been brought down under 18 per cent, have grown better. Because of the tax benefits (in biscuits above Rs 100 per kg) being passed on to the consumers, there has been a growth in consumption. Rural demand has also seen an uptick this year, with a growth of almost 60-70 per cent. Primarily, glucose, milk and Marie are the categories which will see increase in prices. Company will probably look at one category at a time for the price increase. Its flagship brand ParleG that is dominant in the glucose segment, BakeSmith English Marie and Milk Shakti are the brands that would see a price revision."

Company had not increased the prices of these products post the implementation of the Goods and Services Tax (GST), when the government had slapped a uniform tax rate on biscuits.

Biscuits below Rs 100 per kg, including the glucose category, and those above Rs 100 per kg were placed in the 18 per cent tax slab under GST.

Earlier, biscuits priced below Rs 100 per kg did not attract excise duty but the effective tax rate was around 9-10 per cent.

Low priced high nutrition biscuits that are largely priced below Rs 100 per kg is estimated to be a Rs 9,000 crore market, constituting 35 per cent of the Rs 25,000 crore organised biscuit market in the country.

Pristine Organic, a pioneering company in manufacturing organic and nutritional products using a wide variety of broad diverse crops, introduces their wide range of organic millets based products.

Millet is one of the ancient and oldest foods known to mankind. This super crop being reclaimed its importance in the current scenario of global warming, food security and recommended by renowned nutritionists and chefs across the world for its rich dietary fiber and nutritionally superior grain. Pristine range houses a variety of certified millet based organic food products right from cereals, biscuits, porridge, flour to baby food and nutritional supplements.

Pristine’s Breakfast cereals is all-in-one healthy breakfast cereal, a traditional Indian twist to conventional breakfast cereals with no added sugar and is minimally processed. Pristine’s millet cereals houses 3 varieties Mixed Millet Flakes and Ragi Flakes along with Corn Flakes (as corn is not millet). The brand also houses, Mixed Millet Porridge.

Pristine’s Millet biscuits are made with a combination of 5 different millets. Rich in Fiber, MUFA & PUFA, Low in Glycemic Index and is Trans-fat Free. Pristine Mixed Millet biscuits, Oven Organica are known for higher fibre content (15g) in comparison to any well-known fibre rich biscuit in the market today (9g).

The company also sells a variety of certified baby food such as 1st Bites with different stages as per the age group & Poushtik nutritional supplements for family like Balance Active, Balance PL (for preganant and lactating mothers) & Balance HP under their wide range of millet product category.

Premium cookie maker Unibic eying a market share of over 10% in next 12 to 18 months. Cookie market in India is pegged at Rs 7,500 crore, split equally between the premium and mass segments.

Foods Managing Director Nikhil Sen said "Our ambition is to have more than 10 per cent market share nationally in the total cookie market over the next 12-18 months. In the premium-end, in the four markets of South, we have double digit market share. Our presence in the North, East and West is much smaller. We plan to improve our footprint in these three areas that we are not that well available in. We have 900 distributors and close to 60 per cent of our volume comes from traditional trade. We will expand by putting feet on the street in the areas we are under weighted, in terms of market share and try and garner market share there. Our target would be to reach half a million outlets in couple of years. We just invested a fifth line at an investment of Rs 12 crore which takes our capacity to 100 tonnes a day. We are looking at adding at least one new line every year. We are still looking at whether we should invest ourselves or look at contract packing facilities. If we were to invest in capacity ourselves, we would need an investment of Rs 50-60 crore in next five years.”

Cookies constitute around 30 per cent of the total biscuit market which is estimated to be between Rs 25,000-27,000 crore and is growing at twice the rate of the biscuit industry.

Unibic has a strong presence in South and close to 60 per cent of its sales come from the region.

Company, backed by private equity investor Peepul Capital, has 21 variants of cookies under five categories with presence in 2, 00,000 outlets.

Company, which has been growing at a CAGR of 50 per cent and 4.5-5 times the market rate, recently added a fifth manufacturing line at its facility at an investment of Rs 12 crore.

Kolkata-based FMCG major, Anmol Industries said that though biscuits industry remains revenue neutral in the new taxation regime, the company was moving ahead for pan India presence by the current fiscal ending March 18.

Bimal Kumar Choudhary, MD, Anmol Industries, said, "Goods and services tax is revenue neutral for the biscuits industry. We are going ahead with plans to have our footprint in West and South India by this fiscal to have pan India presence."

The company said they are currently restricted in the east and northern markets of the country and enjoys 7% market share in these markets.

Ranendra Nath Ojha, Chief Marketing Officer, Anmol Industries, said, "We have 7% market share in the markets we are operating but on national ranking we are fourth with 4.8 per cent of share in the Rs 28000 crore industry."

The company plans to foray into Andhra Pradesh, Telegana, Maharashtra and Karnataka states in the next few months.

The company that began its journey in 1994 from Dankuni in West Bengal, now has 7 plants with the latest one in Bhubaneswar in Odhisa ramping its production capacity to three lakh tonne per month.

Ojha said, "The Rs 135 crore plant in Odisha will help us to expand in the state and foray into southern states."

Choudhary said, "The company was targeting Rs 2000 crore turnover by 2020. The company did not ruled out an initial public offer in future."

Biscuits and confectionery maker Parle Products has set its target to increase its market share to 18-20 percent in fiscal 2017-18 from 15 percent, in the premium biscuit category.

Mayank Shah, Category Head, Parle Products, said, "We will be expecting decent dividends coming in from our premium range. While we are very strong in the mid-tier or popular range and the mass range, premium is one place where we have started making our mark felt."

He further added, "We have brands like Hide & Seek and Milano and of late we also launched their variants. Having done that, we are seeing an increase in market share in that particular segment. We have seen our market share going up by almost 4-5 per cent in premium segment in last one year."

The premium biscuit category is estimated to be worth around Rs 5,000 crore, growing at 15-17 per cent. Shah said the company is expecting its market share to increase to 18-20 per cent in fiscal 2017-18 from 15 per cent at present.

Its premium offerings include Milano, Simply Good, Happy Happy and Hide & Seek, while the mass brands are Parle G, Parle Marie, KrackJack and Monaco, among others.

He said, "While we would like to improve our share by focusing on premium biscuits, we would also like to consolidate our position in mid-tier and low price range."

Parle Products has a market share of 28 per cent in the overall Rs 36,000 crore biscuit market.

The company has expanded its portfolio over the last two years by launching new products and would be consolidating them before launching new items.

On overall rural demand, Shah said there would be an impact of 2-3 per cent on growth in this segment due to demonetisation.

Shah said, "This year, with a good monsoon, we were expecting good growth coming in from rural but with demonetisation, growth across urban and rural has taken a hit. While we are seeing recovery in urban India, rural will take a bit of more time.

While we expect rural to be the growth driver, the impact of rural growth coming in would only be seen in the next fiscal. This fiscal, we will not be able to realise the full potential of rural demand."

He added, "We were expecting category growth in rural to be in double digits but after demonetisation there would be at least 2-3 per cent impact in rural growth."

The company, which has presence in confectionery and snack segments with brands like Mango Bite, Melody, Fulltoss and Mexitos, among others, said it cut its advertising budget by 15-20 per cent post demonetisation.

Adding that the company spends 7-10 percent of its revenue on advertising, Shah added, "From mid-November to end December, there was hardly any advertising that was done and on an average it would have been 15-20 per cent cut in advertising as a result of demonetisation."

Britannia Industries, one of the leaders in India’s biscuits market is embarking on a new growth path of becoming a total food company, aiming at Rs 20,000 crore turnover within five to six years, reported PTI.

As part of the strategy, the company, which had posted consolidated net sales of Rs 7,775.09 crore in the last fiscal, will finalise in the next six months its plans to expand in dairy segment besides introducing new variants of its value segment biscuit brand Tiger.

However, in the next two years and beyond the company plans to expand into ready-to-eat, ready-to-cook and drinks category in a phased manner.

"We have the core strength...our brands are very strong and our understanding of the food industry is very deep...Our idea to become a total food company is to move from the side of the plate to the middle," said Varun Berry, MD, Britannia Industries.

When asked about the company's ambition in terms of turnover, he said, "In the next five to six years if we have an Rs 20,000 crore turnover I will be delighted."

Further, he says on the company’s strategy that "Macro snacks and dairy categories have huge potential. In the next six months we will be ready with our plans and answers, if we should expand in the dairy segment or not. If indeed we do, dairy will entail investments of Rs 300 crore to Rs 400 crore."

"We were the market leader till 2003-04 and we lost it to Parle but we are happy to tell that we have taken back the leadership earlier this year", says Berry on Britannia's flagship biscuits category.

He said Britannia now leads Parle in terms of share by "150-200 basis points" in the estimated Rs 25,000 crore biscuits market in India. About 75 per cent of the company's turnover comes from the biscuits category.

Berry also says that apart from trying to develop the premium segment and upgrade consumers, the company will also introduce more variants of its value brand Tiger, while enhancing distribution network mainly in the Hindi belt states of North India.

"We have already re-launched Tiger glucose and chocolate ...we will launch Tiger cream next month," he said. In terms of distribution network, he said, "Our biggest weakness is the Hindi speaking states of North India."

Mondelez India Foods, former Cadbury India has chalked out a plan to expand its rural operations as chocolate penetration in the country doubles with rising consumption.

The maker of Cadbury Dairy Milk chocolate, Bournvita milk food drink, Tang powdered drink mix and Oreo biscuits has identified 20,000 high potential villages in nine states where it will deploy its distribution machinery to market its products.

Afterwards, the firm will continue to expand in about 5,000 odd villages every year, Chandramouli Venkatesan, MD, Mondelez India Foods said.

"Rural is increasingly integrating with the mainstream and that is one of the key drivers to growth. Earlier, rural was defined by not only a place where people lived but also the mindset. Today, it's only a place where you stay and the mindset has become mainstream. Better connectivity to technology has enabled this shift," said Venkatesan, who took over at the helm of the firm in January this year. Reaching 7,80,000 villages in India can be a challenging task for a marketer.

When Mondelez, three years back began evaluating the potential of the rural market, it had experimented with placing dispensers at select stores in three villages in Maharashtra where none of its products were available.

"We watched for a month and were surprised that the throughput at these stores was Rs 1,000 in one month. This is comparable to what one would get in a lower end store in urban India," said Venkatesan. Mondelez realised that the rural consumer was willing to purchase its products much like its urban counterpart. Over the last decade, the per capita consumption of chocolate in India has trebled from 30 gm per annum to over 100 gm.

The rising per capita consumption of chocolate in the country and the potential growth in rural India, has led Mondelez to invest close to $200 million in capacity expansion and visi-coolers.  According to a Nielsen report, Mondelez draws 12 percent of it’s roughly Rs 7,000 crore turnover from rural markets.