India Biscuits Industry is the largest among all the food industries and has a turn over of around Rs

INDUSTRY ANALYSIS

ON

BISCUIT INDUSTRYUnder the guidance of:

Mrs. SUKANYA (Assis. prof.) CONTENTS

1) CHAPTER-1 INTRODUCTION

2) CHAPTER-2 PRODUCT LINES AND CUSTOMER BEHAVIOR

3) CHAPTER-3 GROWTH OF THE INDUSTRY

4) CHAPTER-4 TECHNOLOGY OF PRODUCTION AN DISTRIBUTION5) CHAPTER-5 MARKETING

6) CHAPTER-6 INNOVATION7) CHAPTER-7 STRATEGIES AND COMPETETION IN THE INDUSTRY

8) CHAPTER-8 BUSINESS ENVIRONMENT9) CHAPTER-9 CRITICAL SUCCESS FACTORS10) APPENDICIES CHAPTER-1

INTRODUCTIONOVER VIEW OF THE INDIAN BUSCUIT INDUSTRY

Biscuit industry contribute Rs 8,000 crore to the FMCG industry and provide a vast opportunity for growth, as the per capita consumption of biscuits is less than 2.1 kg in our country. India It is classified under two sectors: organized and unorganized. Branded /Organized to Unbranded/Un organized market share of biscuit has been 70% for Organized sector and 30% for Unorganized sector . Apart from Big 3( Britannia , Parle , ITC ) there are around 150 medium to small biscuit factory in India .

The Industry is now facing problem from increase of raw material price. With Government VAT up to 12.5% has added to their woes .Biscuit consumption per capita in India has grown to 2.1kg per capita in comparison to 10kg per capita consumption in USA ,UK and Europe . India Biscuits Industry came into limelight and started gaining a sound status in the bakery industry in the later part of 20th century when the urbanized society called for readymade 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. States that have the larger intake of biscuits are Maharashtra, West Bengal, Andhra Pradesh, Karnataka, and Uttar Pradesh. Maharashtra and West Bengal, the most industrially developed states, hold the maximum amount of consumption of biscuits. Even, the rural sector consumes around 55 percent of the biscuits in the bakery products. The total production of bakery products have risen from 5.19 lakh tonnes in 1975 to 18.95 lakh tones in 1990. Biscuits contributes to over 33 percent of the total production of bakery and above 79 percent of the biscuits are manufactured by the small scale sector of bakery industry comprising both factory and non-factory units.

The production capacity of wafer biscuits is 60 MT and the cost is Rs.56,78,400 with a motive power of 25 K.W. Indian biscuit industry has occupied around 55-60 percent of the entire bakery production. 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. Besides, the export of biscuits will also surpass the target and hit the global market successfully.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. Britannias market share stands at Rs 27 billion. Parle derives a large portion of its revenues from low-priced biscuits. Parle-G and Britannia derive a fairly large share of their revenues from the medium- and premium varieties. In fact, Britannia's market share in the medium and premium varieties is significantly higher. Other organized players include domestic players like Brakemans, Champion, Kwality, Priya and MNCs like SmithKline Consumer, Kelloggs, Sara, Heinz, Excelsia (Nestle) and United Biscuits. The unorganized sector consists of small bakery units, cottage and household type manufacturing their goods without much packaging and distributing their goods in the surrounding areas. Lower overheads due to limited local area, family management, focused product lines and less expenditure on marketing help the unorganized sector togrow. The organized biscuit manufacturing industrys annual production were around 1.1 million tons in 2003-04, 1.25 million tons in 2004-05, 1.4 million tons in 2005-06, 1.6 million tons in 2006-07 and 1.7 tons in 2007-08. HISTORY OF BUSCUIT 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 via Middle French and means "cooked twice" (similar to the German Zwieback). Some of the original biscuits were British naval hard tack. That was passed down to American culture, and hard tack (biscuits) was made through the 19th century. Biscuit can flourish in any environment where there is a base population, in the immediate vicinity of the plant; a country with large population is well suited for a biscuit plant. 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. This growth has funneled a growth of all facets of biscuit making in India. While the modern India is considered a centre for software development, many do not realize that one industry that has developed similar capabilities is Biscuit.

Today India can boast of being Most cost effective and reliable biscuit machinery making center.

Most talented senior management and technical manpower pool for biscuit making.

Most number of biscuit production manpower and operating technicians manpower

Most reliable center for outsourcing manufacture of biscuits.

Most cost effective center for food testing laboratories.

Most cost effective and talented centre for product development, research and formulation development.

FEDERATION OF BISCUIT MANUFACTIRE OF INDIA

FBMI, Established in 1950, from gathering of CEOs of small, medium and large Biscuit manufacturing organizations in the countrys capital city, the Federation of Biscuit Manufacturers of India, popularly known as FBMI has come to stay as the premier forum of the organized segment the biscuit industry in India, by virtue of its effective servicing and result oriented activities, with the prime objective of protecting and promoting the interests and development of the Biscuit industry.

The FBMI represents the organized biscuit industry consisting of small scale, medium and large biscuit manufacturers located in all zones and all States of the country. As the apex body of the biscuit industry, the Federation strives to serve its members in particular and the biscuit industry in general.OBJECTS

To promote, protect and safeguard 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, particularly for the benefit of SMEs manufacturing biscuits 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 from any such Government or authority rights, concessions and privileges which the Association may think it desirable to obtain and to carry out, exercise and comply with any such arrangements, rights, privileges and concessions.LIST OF THE PLAYERS IN THE INDUSTRY The major Brands of biscuits are - Brittania, Parle Bakeman, Priya Gold,Elite,Cremica, Dukes, Anupam, Horlicks, Craze, Nezone, besides various regional/State brands. Britannia , Parle , ITC foods , Surya Foods othersRegional bakery brands

few regional players have made a mark in their respective zone,

HARVEST GOLD

CREMICA

PRIYA GOLD

DUKES

COOKIE MAN

ANMOL

MONGINIS

BONN

BISK FARM

ELITE

ANUPAM

MODERN

SABISCO

CHAMPION

VEERMANIFOREIFN PLAYERS Foreign players like United Biscuits and McVities have also entered the fray. However, these players have concentrated themselves in the super-premium and premium segments.BRIEF PROFILE OF THE PLAYERS IN THE INDUSTRYBRITANIA INDUSTRIES LIMITED Britannia Industries Limited is an Indian company based in Kolkata that is famous for its Britannia and Tiger brands of biscuit, which are highly recognized throughout the country. Britannia is one of Indias leading biscuit firms, with an estimated 38% market share. Once upon a time, in 1892 to be precise, a biscuit company was started in a nondescript house in Calcutta (now Kolkata) with an initial investment of Rs. 295. The company we all know as Britannia today.

On the operations front, the company was making equally dynamic strides. In 1992, it celebrated its Platinum Jubilee. In 1997, the company unveiled its new corporate identity - "Eat Healthy, Think Better" - and made its first foray into the dairy products market. Britannia strode into the 21st Century as one of India's biggest brands and the pre-eminent food brand of the country. It was equally recognised for its innovative approach to products and marketing.

Main products produced by Britannia industries are,

Good Day,Tiger,Marie Gold,50- 50,Choco -chips,Choco - nuts,Little Heart,Nutri Choice,Bourbon, NiceTime, Pure Magic, Milk Bikis,Jim -Jam,Cream Treats,Time Pass, Digestive, etc.

PARLE COMPANY In 1929 a small company by the name of Parle products emerged in British dominated India. The intent was to spread joy and cheer to children and adults alike, all over the country with its sweets and candies. Parle Products has been India's largest manufacturer of biscuits and confectionery, for almost 80 years. Makers of the world's largest selling biscuit, Parle-G, and a host of other very popular brands, the Parle name symbolizes quality, nutrition and great taste. With a reach spanning even the remotest villages of India , the company has definitely come a very long way since its inception. Many of the Parle products - biscuits or confectioneries, are market leaders in their category and have won acclaim at the Monde Selection, since 1971. With a 40% share of the total biscuit market and a 15% share of the total confectionary market in India , Parle has grown to become a multi-million dollar company. While to consumers it's a beacon of faith and trust, competitors look upon Parle as an example of marketing brilliance.Major products are,Parle - G ,Hide and Seek, Krackjack, Hide & Seek, Milano, Magix, Digestive, Marie Monaco Parle Marie, Kreams, Milk Shakti, Parle 20-20 Cookies ,Nimkin, etc. Parle biscuits are indeed much more than a tea- time snack, they are considered by many to be an important part of their daily food. Parle can treat you with a basket of biscuits which are not only satisfying but are also of good and reliable quality. Parle biscuits cater to all tastes from kids to senior citizens. They have found their way into the Indian hearts and homes.ITC LIMITED ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited. TC's foray into the Foods business is an outstanding example of successfully blending multiple internal competencies to create a new driver of business growth. It began in August 2001 with the introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes. 2003 witnessed the introduction of Sun feast as the Company entered the biscuits segment.The packaged foods business is an ideal avenue to leverage ITC's proven strengths in the areas of hospitality and branded cuisine, contemporary packaging and sourcing of agricultural commodities. ITC has stood for quality products for over 90 years to the Indian consumer and several of its brands are today internationally benchmarked for quality. Leadership in the Foods business requires a keen understanding of the supply chain for agricultural produce. ITC has over the last 90 years established a very close business relationship with the farming community in India and is currently in the process of enhancing the Indian farmer's ability to link to global markets, through the E-Choupal initiative, and produce the quality demanded by its customers. This long-standing relationship is being leveraged in sourcing best quality agricultural produce for ITC's Foods Division.Major products by ITC are,Milky magic, Marie, Golden Bakery, Dark Fantasy, Glucose, Dream Cream, Snack, Sweet n Salt, Nice, Vita, Special, etc.

SURYA FOODS & AGRO LIMITED

Surya Food & Agro Ltd. was incorporated in November 1992 and commenced its commercial operations of manufacturing & selling of biscuits under brand Priyagold in October 1993. Over a period, It established strong manufacturing capabilities and have invested substantially in developing consumer preference for products. Its trademarks / brands Haq Se Maango & Priyagold have emerged as one of the most powerful brands in the FMCG sector.The company is committed to invest in brands, manufacturing capabilities, deliverables and distribution strength.Its strategy of strengthening the brands especially the umbrella brand Priyagold has resulted in creating immense brand recall value. The company is continuing with its effort of strengthening the brand with a scientific approach, which will result in growth of customer base, price premium, consumer loyalty which is expected to result in increased earning and ultimately enhancing enterprise value of the company.Major products produced by the company are,Butter Bite, Classic cream, Kids Cream, Bourbon, Marie Lite, Big Boss ,Magic Gold, CNC, Cheese Cracker, Snacks Zig Zag, Don, Coconut Crunch, Cheez Bit, Chat Patta, and etc.

CATEGERISATION OF PLAYERS IN THE INDUSTRY

Britannia and Parle the two food majors of India in the field of biscuits. In the last years it was market segments which both have dominated and not much was seen to disturb that arrangement. Parle with its Parle G , Krackjack and Manaco where as Britannia has Good day , Marie gold , Creams.

Britannia dominated the premium segment of biscuits where as Parle dominated the mass ,low premium biscuits ,things were pretty predictable but for the entry of new players have changed that status. Now that ITC and Priya gold are trying to break into their market and have established themselves as important players in biscuit market . These two major biscuit producers has are now forced to innovate products by the consumers to create brands which could be differentiated.Both are trusted brand are ranked in top brands for biscuit, both have a long history of brands . The Major difference though is that where Britannia is revenues from bakery products is around 90 % ,share of biscuit sales is around 80% for Parle.PARLE VS BRITANNIA

DescriptionBritanniaParle

Established18961929

Nature of businessPublic ltdFamily run business

No of manufacturing units5 own ,40CMU8 own units ,60 CMU

Market share ( value)32.80%32.94%

Ads Major methods Cricket events and players Celebrities endorse ment

New areas of promotionEnvironment Health and wellness

IMPORTANT BRANDS PITCHED AGAINST EACH OTHER CategoryBritanniaParleLeader

GlucoseTigerParle -GParle-G

MarieMarie GoldParle Marie Marie Gold

Salty snacks50-50Krack JackKrack Jack

Choco chipsGood dayHide n seekGood day

MilkMilk bikisMilk sakhtiMilk bikis

BourbonBourbonHide n SeekBourbon

Nice Nice------Britannia Nice

Multi grainNutri choice-----Nutri choice

Cream Cream TreatKreamsCream treats

CookieGood day20-20Good day

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

CHAPTER-2PRODUCT LINES AND CONSUMER BEHAVIOR

RANGE OF PRODUCTSBiscuit can he broadly categorized into the following segments (Based on productions)

Glucose (44 percent), Marie (13 percent), Cream (10 percent), Crackers (13 percent), Milk (12 percent), Others (8percent).PRODUCT DESCRIPTION:

Biscuits contain high nutritive value and are manufactured from wheat-flour, sugar, baking powder, condensed milk, ghee (fat), salt, jelly, dry fruits, various essences and flavouring etc. Different type biscuits can be classified,Glucose Biscuits: Glucose Biscuits are made with pure wheat, sugar, salt and other ingredients. Glucose biscuits are the main stay of Indian biscuit industry . Glucose market share was growing at a very low rate but suddenly for the last three years there has been drop in glucose biscuit sale . All three major biscuit manufacturers( ITC ,Parle , Britannia ) has started re jigging their product mix ( SKU s ) in flavour of premium biscuit against glucose biscuit .The Glucose share is almost 50% of the total biscuit market share.Cream biscuits: Basic Characteristics of Product are, Crisp or crunchy texture

Distinctive flavours(orange, butterscotch, and mango etc.) Flavors that may change (loss of initial flavour)

Marie Biscuits: These products are fragile and characterised by a low moisture content (