26-06-2013, 02:33 PM
INDUSTRY ANALYSIS ON BISCUIT INDUSTRY
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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, 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.
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. 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 Brakeman’s, Champion, Kwality,
Priya and MNC’s 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 to
grow.
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.
FEDERATION OF BISCUIT MANUFACTIRE OF INDIA
FBMI, Established in 1950, from gathering of CEOs of small, medium and large
Biscuit manufacturing organizations in the country’s 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.
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.
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.
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.
CONCLUSIONS:
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 finances.