Environmental and Social Responsibility of Biscuit Brands in India

Report

Submitted by

Kowsalya Suganthi M

09AC19

In partial fulfillment of the requirements of Anna University for the award of the

degree of

Master of Business Administration

MARCH 2011

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CERTIFICATE

This is to certify that the report titled

ENVIRONMENTAL AND SOCIAL RESPONSIBILITY OF BISCUIT BRANDS IN INDIA

is a bonafide work done by

Kowsalya Suganthi M

09AC19

for the award of degree of

Master of Business Administration

---------------------------- ---------------------------- Dr.R.NANDAGOPAL Mr.Ajit Shankar

Head of the Institute Faculty Guide

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Declaration

I hereby declare that all the content in the report is original. It is not plagiarized and

not been used by any other person for any other work before.

Signature

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Acknowledgement

I am heartily thankful to the Director, Dr.R.Nandagopal, whose encouragement for

doing the report from the initial to the final level enabled me to develop an

understanding of the subject.

I sincerely thank my faculty, Mr. Ajit Shankar, for guiding me all the way through the

proceeding and making it a successful one.

I also wish to express my gratitude to the other faculty members of PSG Institute of

Management, who rendered their help during the period of doing the report.

Last but not least I wish to avail myself of this opportunity, express a sense of

gratitude and love to my friends and my beloved parents for their manual support,

strength and help for everything.

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CONTENTS

S.No Topic Page No.

1 Introduction 6

2 Meaning of SER 6

3 Study of SER 7

4 Tools utilized 8

5 Detailed Study 8

6 Conclusion 18

7 Sources 19

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I. Introduction:

Biscuits these days are considered to be the tastier and healthy snacks for

children and people of different age groups. The term Biscuit is divided into

two parts “Bis” which means “Twice” and “Coquere” which means “Cooked”

in Latin. This name was derived was biscuits were cooked twice in olden

days. These tastier biscuits do not have a proper history that can be told.

Though there is no proper history it found that biscuits were invented long

back in the 14th century by the Romans. As per the Roman cookbook Apicius

biscuits were made with a thick paste of wheat flour. This paste would be

spread out on a plate and let to dry. After it dries up, it is cut into pieces and

served. Earlier biscuits were so hard and therefore were called as “Stone

Bread”. This trend was changed by the Americans. They introduced biscuits

which were soft. This is how biscuits came into existence.

It is also said that the French also were involved in the invention of Biscuits.

Though the French had invented biscuits, it is said that the French biscuits

are the worst biscuits a person can ever taste. Now a days the most popular

manufacturers of biscuits are the Americans. Their biscuits and cookies are

the best and tastier too. Biscuits today are of many shapes, types and

consist of various ingredients too. There are cream biscuits, sweet biscuits,

salt biscuits, tea biscuits etc. The advantages of biscuits are it can be easily

carried during long distance travel, they are small in size and a healthy

snack.

II. What does being Socially and Environmentally Responsible

mean?

The term Socially and Environmentally Responsible means making the public

aware of certain problems in the environment and also protecting the

environment from being destroyed. Some of the ways in which a company

can be socially responsible are:

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Company can give funds for charities

Fund academic scholarships

Support community-building initiatives

Commitment not to pollute the environment etc.

On the other hand environmentally responsible from the company’s point of

view means producing products that do not harm the environment. A

company can be environmentally responsible by

Using fewer resources

Using solar energy and wind energy

Emitting less CO2 etc.

In today’s world it is really necessary for companies to be socially and

environmentally responsible. This is so because the general public will never

contribute for the well being of the earth and future generations. But the

companies are responsible for the purpose of profit and sales of their

product. Though the motive is selfish, the outcome is positive.

III. Study of Socially and Environmentally Responsible Biscuit

Brands:

This is a study to find out the brands of biscuits that are socially and

environmentally responsible. This study is done keeping in mind the welfare

of the people as well as the environment. I have focused on the Indian

market and done the study. The sample size I have chosen is eight. The

reason why I selected these eight brands is because they are the top players

in the biscuit market. The brands are:

Britannia

Parle

Complan (Heinz)

Tiffany

Sunfeast (ITC)

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McVities (United Biscuits)

Horlicks (GlaxoSmithKline)

Cadbury OREO (Kraft Foods)

These brands are compared among themselves for the purpose of ranking

the safe, healthy and responsible product. For ranking these biscuit brands I

have utilized few tools as a platform, because without certain parameters

things can never be compared and ranked.

IV. Tools utilized:

Before getting into the detailed study of the products, there is a need to list

out the tools used to rank the products. The tools selected only plays an

important role in the study. Without these nothing can be done in a proper

way. The tools are selected in such a way that they are related to the topic

and are very essential today. The list of tools is as follows:

CSR activity

Eco-Friendly

Usage of Genetically Modified Products

Health and Hygiene

Packaging

Distribution

Customization

V. Detailed study:

a) CSR activity:

This is considered to be the most important and foremost tool. When we hear

the word social and environment responsibility, the word that strikes us is

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CSR activity. CSR activity can be both social and environment related. These

biscuit brands are into various CSR activities which is dealt in detail below.

BRITANNIA:

Britannia works towards the betterment of Community and Health. Therefore

they focus their CSR activity in this segment. The CSR activity of Britannia

will be as follows:

Partnership with Global Alliance for Improved Nutrition (GAIN)

and Naandi Foundation to provide Tiger biscuits that contains

iron to the children in the Mid-Day meal program in schools.

It is supposedly said that Britannia does only one CSR activity as of now.

Britannia is expected to get themselves involve into lots of CSR activities in

the near future.

PARLE:

Parle is not involved into any CSR activity. But they do have certain

campaigns organized during festive seasons. This is done for the purpose of

keeping our traditions alive. Some of the campaigns of Parle are:

Saraswati Vandana – This programme is based on the

saraswati pooja and it takes place in the state of West Bengal.

It is being done for the purpose of developing the creative

skills in children wherein they can showcase any of their

talents.

Golu Galatta – This is an event that happens in the state of

Tamil Nadu. Parle has taken the initiative to award the house

that has been decorated wonderfully with dolls. This is done

keeping in mind the fading tradition of Golu in Tamil Nadu.

My Green Planet – This is another initiative by Parle for the

purpose of keeping the planet neat and green.

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CADBURY OREO:

Cadbury is not an Indian company. But they too are doing little CSR activity

for the well being of the state where their factory is located. These are the

activities they perform.

Dam construction – This is done for the purpose of storing rain

water. They only use the rain water that has been collected in

the dam and not the outside water for their manufacturing

process. This dam has been constructed in Bangalore.

Cocoa Cultivation – Unlike other companies, Cadbury has its

own cocoa cultivation farm which has been set up in the year

1974. This reduces the export cost for them as they need not

export cocoa from other countries. Since cocoa is self

cultivated it is hygiene.

Installation of Solar Streetlights – In the city of Bangalore

where lots of energy is being consumed, Cadbury has

installed 28 solar streetlights. This will save energy as only

the energy from the sun is used here.

SUNFEAST:

Sunfeast is a product of ITC. It is well known that ITC is involved into lots of

CSR activities. They not only focus on the community, but their focus is also

on the environment. Towards the environment they:

Have been “Carbon Positive”

Have been “Water Positive”

Have 100% solid waste recycling

Perform all activities related to environment, health and

safety according to the best international standards

Towards the society they:

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Have generated livelihoods for 5 million people

Have taken e-choupal initiative by educating the farmers

about internet which has benefitted 4 million farmer families

Developed a Watershed initiative that brings rain water to

about 35,000 hectares of dry lands and moisture stressed

areas

Work towards the empowerment of women

Provide primary education to the children in the backward

villages

Help in livestock development by making the farmers and

owners of the cattle aware of the cattle health and various

other things

Also do social and farm forestry

In this way different companies do different CSR activities. There are biscuit

brands that are not at all involved in any CSR activity. They are Tiger biscuits

by Kraft Foods, McVities by United Biscuits, Horlicks by GlaxoSmithKline,

Complan by Heinz and Tiffany. So they cannot be rewarded any points. This

can be clear from the ranking table:

Biscuit Brand Ranking % on CSR

Britannia 3 3.4% on 3401.4cr

(Revenue)

Parle 0 Not Available

Sunfeast 1 16% of 8000cr

(Revenue)

Cadbury Oreo 2 Not Available

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McVities 0 Not Available

Horlicks 0 Not Available

Complan 0 Not Available

Tiffany 0 Not Available

The ranking given above are based on the CSR activity and the amount

spent from their revenue. In the case the revenues are available only the

CSR activity is considered because more the CSR activity more amount will

be spent for it.

b) Eco-Friendly:

Under this head, a company needs to be friendly with the people and also

the environment. That is they must produce goods that cause no harm at all.

Here companies are said to be Eco-Friendly if they

Are able to reduce Carbon dioxide emission

Reduce water wastage

Use less electrical energy and more solar, wind energy

Recycle the waste

Use renewable resources for their production purposes

Minimize the packaging waste and

Make use of environment friendly vehicles

The ranking are:

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It is found that Sunfeast does most of the activities that are mentioned

above. While brands like Britannia and others are not so eco-friendly as they

have a lots of problems relating to the ingredients they use and also towards

the environment which will be explained later below.

c) Usage of Genetically Modified Products:

The usage of GM food products in the snacks produced by the biscuit

companies have become a serious issue these days. To identify this, there is

a Non-profit organization named “Greenpeace” which looks into problems

related to the environment and human health. Their main objective is to

protect the environment and human lives from dangerous products. Not only

this, they also work towards bringing these cunning activities to the light.

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Here the Greenpeace has selected few food companies and asked them for a

report stating whether they are using GM food in their products or not. But

very few companies had responded to it. They have segregated the

companies as:

Green Companies – These are the companies that do not use

GM products in their biscuits.

Red Companies – These are the companies that use GM

products in their biscuits.

The brands of biscuits placed in the Green list are:

These biscuit are safe to eat as they do not have GM food products.

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The following are the brands that are considered to be dangerous for our

health:

According to Greenpeace, it is really very unsafe to buy products of

Britannia. They are the large users of Genetically Modified Products in their

biscuits. The remaining brands are not rated because they have publicly

accepted saying that if not now, they will be using GM food products in the

future.

d) Health and Hygiene:

When it comes to food products, health and hygiene is something important

that is to be noted. If the food is healthy and hygienic, it will gain more

points when ranking. Not only this is to be considered, but also the

ingredients used in the biscuits should be considered. All the brands of

biscuits aim at producing healthy and hygiene biscuits. For the purpose of

producing healthy products some companies add ingredients that are

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harmful for our health. This tool is somewhat related to using GM products.

So, the results of the previous tool can be applied here. It is suggested to

avoid purchasing Britannia biscuits. The brand that I would prefer in case of

health and hygiene would be:

e) Packaging:

The reason why I chose packaging as a tool is because biscuits need to

safely packed and transported. When it is packed if the packing is not proper

they may get spoilt. Under packaging each brand follows different types of

techniques. Let us talk about each brand separately.

Britannia and Parle:

In the case of Britannia and Parle, both use same kind of packaging

techniques. They can be said as follows:

Custom packaging – Here the packaging will be done depending

on the shipment. If the biscuits are to be delivered locally, then

the package used will be different from what will be used when

exported.

Eco-Friendly – The package covers used by these two brands are

not harmful to the environment as they use recycled covers.

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Bio-degradable – The material used for packing is bio-degradable

and can be easily decomposed in the soil. This does not cause

any harm to the environment like that of plastic bags.

Moisture proof – The package used by them are moisture proof.

This is something very essential as, if the biscuits get

moisturized then they’ll get soften and spoiled. This will have a

bad impact on the brands.

Flat packing – This type of packing is used so that the biscuit

packages do not occupy much space while transporting them. It

is also possible to transport a huge quantity of goods in one go

itself.

License – Regarding packing, it is necessary for companies to get

license such as QS, ISO 9001:2000 etc. This license is given to

companies who does packaging without affecting the

environment and harming the food inside packages.

Sunfeast:

The methods adopted by Sunfeast for packing their biscuits are as follows:

Green packing – This packing involves the usage of raw

material from sustainable sources and conversion of the same

in a facility which is 100% powered by renewable energy

(Wind Energy).

Coated paperboard packing – It is a kind of packing technique

wherein the company coats the recycled cover with some

chemical and uses it.

License – Sunfeast has also got license from ISO 9001, ISO

14001 and OSHAS 18001 for the purpose of proper packing.

The result for packaging can be:

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Though Britannia and Parle are taking lots of steps for proper packing,

Sunfeast has made it clear that they only pack using recycled material. No

matter whatever purpose it is. Therefore it is given the highest rank than the

other two brands.

f) Distribution:

The distribution process is almost same for all the brands. As mentioned

above regarding packing. Since flat boxes are used, a large quantity can

transported at a time. This reduces the usage of petroleum and number of

trips for the vehicles. The biscuits are distributed to the wholesaler. The

brands having proper distribution channel and are socially responsible too

will be:

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g) Customization:

This means producing biscuits keeping in mind the needs and likes of the

consumers. In this case Britannia leads the market by producing biscuits for

various categories of people. They even have biscuits for diabetic people.

When producing biscuits they do a survey to know the tastes and preference

of the people over there. After doing all these, they start manufacturing and

use the ingredients accordingly. The best customized brand of biscuit will be:

VI. Conclusion:

In the current scenario it is not possible for the people to know about the

biscuits that are healthier. It is also not feasible to know which brand is more

socially and environmentally responsible. Therefore a study has been made

and a conclusion has been arrived at wherein the best brand of biscuit that is

being socially and environmentally responsible is found. From the table given

below, conclusion can be arrived.

Tools used for ranking Best Brand

CSR activity

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Eco-Friendly

Use of GM products

Health and Hygiene

Packaging

Distribution

Customization

It is very clear that Sunfeast a product of ITC has topped among the other

entire brand. The reason why Sunfeast biscuits have topped the table is,

because of its non usage of GM products and also because it is more socially

and environmentally responsible than other brands. This ranking can again

be divided on the basis of health and tastiness. When it comes to health, my

choice will always be Sunfeast. On the other hand when it comes to variety

and tastiness, it can be Britannia or Parle as both are equally good.

So, as my personal conclusion I would suggest all of you people to buy

Sunfeast and contribute a part for saving the planet.

VII. Sources:

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http://www.nicecupofteaandasitdown.com/biscuits/index.php3

http://www.foodreference.com/html/a-biscuit-history-1008.html

http://www.britannia.co.in/history.htm

http://www.parleproducts.com/csr/golu_galata.php

http://dev2.previewbox.co.uk/data/file/2009%20Environmental

%20update.pdf

http://www.kraftfoodscompany.com/Responsibility/index.aspx

http://www.itcportal.com/sustainability/lets-put-india-first/default.aspx

http://www.itcportal.com/itc-business/paperboards-and-packaging/

packaging.aspx

http://www.karmayog.org/csr2009/csr2009_29279.htm

http://www.karmayog.org/redirect/strred.asp?docId=29464

http://www.slideshare.net/paddyfly/c-s-r-presentation-presentation

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