Oct 4, 2000|
Indian biscuits: Getting sweeter with time
The over 2 million tonnes per annum Indian biscuits market is valued at Rs 80 bn currently. It is largely dominated by the unorganised sector. The organised biscuit segment accounts for only a third of this market.
Low margins, and a high level of fragmentation characterize this segment. Awareness is nearly 100%; however, penetration is lower in rural areas at 15-20% and at 60% in urban areas. This is mainly because these products are consumed as snacks, and do not form part of the main course meal. Volumes, brand loyalty and strong distribution networks drive this market, which is growing at 6-7% annually.
Britannia is the market leader with a 40% market share in value terms. Parle and Bakeman’s control 27% and 9% respectively of this market. Glucose biscuits account for 36% of the total organised biscuit market, followed my Marie and its variants at 18%.
||Tiger, Tiger Oro
||Parle-G, Ampro, Bakeman's Glucogold
|Arrowroot / Marie
||Mariegold, Jacob's Thin
||Maritime, Bakeman's Marie
|Sweet & Salted
||Elaichi Cream, Pure Magic, Orange Cream,
Bourbon Choclate Cream Jim Jam
|Parle Orange Cream, Bakeman's Cream
Crunch, Horlicks, Sandwich Biscuits
||Good day, Little Hearts,
Calypso Coconut, Nice, Top
|Bakeman's Butter-Yums, Horlicks
Bakeman's Cookiez, Parle's Hide & Seek
|Wafers & others
The margins are small in mass-market biscuits such as Glucose and Marie, so companies look at these segments to gain volumes. To earn higher margins biscuit majors are bringing in a slew of speciality biscuits (like cream biscuits, cookies, wafer biscuits, cashew biscuits etc.). This segment is showing a healthy growth at 20% per annum.
The entry of foreign majors like Sara Lee is an indication of the competition brewing from overseas. It is not that domestic companies are missing out on the quality or technology (Britannia is promoted by Group Danone, France) but the entry of foreign players will put pressure on the domestic companies to introduce more variants of high-end biscuits.
Packaging of these products has already undergone a sea change in the last few years. Growing competition will force companies for ‘top of the mind’ product launches and adopt even higher standards of packaging and brand promotion. Britannia was one of the first companies to realise this. As a result, the company has redone its whole image and is trying to attract consumers on the ‘health and nourishment’ plank.
These are indeed exciting times for this segment.
More Views on News
Jun 20, 2017
While GSK consumer reported muted revenue growth, volumes are seen to be recovering.
Feb 8, 2017
ITC Ltd has announced third quarter results of the financial year 2016-2017 (3QFY17). The company has reported 4.7% YoY and 5.7% YoY growth in revenues and net profits respectively. Here is our analysis of the results.
Dec 7, 2016
ITC has announced second quarter results of the financial year 2016-2017 (2QFY17). The company has reported 8% YoY and 10.5% YoY growth in revenues and net profits respectively.
Jun 8, 2016
ITC declared results for the quarter and year ended March 2016. During the year, the company's net revenues and profits rise by 1% YoY and 3% YoY respectively.
Jun 1, 2016
GSK Consumer Healthcare announced its results for the quarter and year ended March 2016. During the quarter, sales and profit came in lower by 9% YoY and 8% YoY respectively.
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407