A

WINTER Project Report

TREND ANALYSIS OF SNACK FOOD MARKET IN INDIA

By

GIRISH KUKREJA

DEPARTMENT OF MARKETING
INSTITUTE OF PROFESSIONAL EDUCATION &
RESEARCH
[2010 – 2012]
 A

WINTER Project Report

On
TREND ANALYSIS OF SNACK FOOD MARKET IN INDIA

IN PARTIAL FULFILLMENT OF REQUIREMENTS FOR

POST GRADUATE DIPLOMA IN MANAGEMENT
IN

MARKETING
SUBMITTED BY
GIRISH KUKREJA

Under The Guidance of

Prof. Mahesh Soni

INSTITUTE OF PROFESSIONAL EDUCATION &

RESEARCH [ 2010 – 2012]
 ACKNOWLEDGEMENT

I wish to express my gratitude to those who, helped me in accomplishing this

challenging project
on ―TREND ANALYSIS OF SNACK FOOD MARKET IN INDIA‖No amount of written
expression can show my deepest sense of gratitude to my guide PROF. MAHESH SONI
(FACULTY MARKETING), IPER, PGDM. Who motivated me to receive enormous amount of
input and inspiration at the various stages during my project preparation and
assisted me in
bringing out my project in the present form.I thankfully acknowledge an active
support by my
Project Guide who overwhelmingly shared his knowledge with me and strengthened my
conceptual framework. I am also thankful to all the Marketing Faculties of
INSTITUTE OF
PROFESSIONAL EDUCATION AND RESEARCH (IPER), BHOPAL who supported me in
various ways and enlightened me about the valuable information pertaining to my
research work.

GIRISH KUKREJA
 INDEX

TOPIC

1.CONCEPTUAL OVERVIEW
INDUSTY OVERVIEW

2.RESEARCH METHODOLOGY
OBJECTIVE OF STUDY
RATIONAL OF THE STUDY
METHODOLOGY
DATA SOURCE
DATA COLLECTION METHODOLOGY
LIMITATIONS
SIGNIFICANCE

3.THEORITICAL BACKGROUND
MAJOR PLAYERS IN THE MARKET
MARKETING STRATEGY

4.DATA ANALYSIS & INTERPRETATION

5.CONCLUSION

BIBLIOGRAPHY
 EXECUTIVE SUMMARY-

This is a project to know the biscuit industry ,to estimate the reason for the
change in the
consumption pattern of the consumers .An attempt to know the trend of the snack
food
market(chips and biscuits) in India .Major players in the industry are taken ,their
contribution to
the industry ,their market share and their sales for the past five years is
taken .It results in
reflecting the trend prevailing in the country ,the growth of the snack food market
in India .The
change ,shift in the eating habit of the Indian peoples and their tastes and
preferences towards the
biscuit and chips market of the country. The change in the variety of the snack
food offered ,the
strategies adopted by the different companies(players in the industry) ,the
variants in the types of
flavors produced , and invented to meet the changing tastes of the consumers and
also to survive
and take a lead in the growing competition of this market.
INTRODUCTION-
The snack food market in India is $3 billion; with the organized segment accounting
for almost
half of the market share and growing at rate of 15 to 20 percent per year. However,
the imported
snack food market is growing but small ($30 million) due to high import duties, a
complex
distribution network and availability of relatively cheaper domestic snack foods.
Over the past
six years, exports of U.S. snack foods to India have grown almost ten times to $5
million in CY
2007. A growing economy, changing lifestyles, rise in disposable incomes and
preference for
quality products of U.S. origin will continue to fuel growth of imported U.S. snack
food items in
India.

Around 1,000 snack items and 300 types of savories of diverse tastes,
forms,textures, aromas,
bases, sizes, and fillings are sold in India

Potato chips and potato based products are by far the largest product category with
over 85
percent share ofthe salty snack market, followed by snack nuts, chickpea and other
pulse-based
savory snacks. Popcorn, diet snacks (soy nuts, bread sticks), breakfast
cereals,baked & roasted
snacks (biscuits, specialty breads, chocolate coated snacks, cookies etc.) and
cheese snacks are in
high demand across organized retail chains. Healthfoods, health food supplements
and
convenient foods are also rapidly growing segments.

As per an industry estimate, the branded and organized snack food segment dominated
by major
players such as Frito Lay, Con Agra, Kellogg‘s, Marico, Dabur, HLL, ITC, Parle,
Haldiram‘s,
Nestle, Britannia, Cadbury, Bikano and Balaji is estimated to grow by 15 to 20
percent per year;
whereas the growth of un-branded snack food is likely to grow modestly at 8 percent
per year in
the near future.

Product pricing for branded products are normally 15 to 20 percent greater than for
the un-
branded food segment due to higher overhead expenses. Snack food packaging ranges
from
35/40 gm sachets to 400 gm economy packs. Small packs work very well in India.

A biscuit (pronounced /ˈbɪskɨt/) is a baked edible product. The term is used to

apply to two
distinctly different products in North America and the Commonwealth Nations.

In the United States it relates to a small soft leavened bread, somewhat similar to
a scone.

In Commonwealth English, it commonly is used to refer to a small and hard, often

sweetened,
flour-based product, most akin in American English to a cookie, or sometimes in the
case of
cheese biscuits, a cracker.
India Biscuits Industry is the largest among all the food industries and has a turn
over of around
Rs.3000 crores. India is known to be the second largest manufacturer of biscuits,
the first being
USA. It is classified under two sectors: organized and unorganized. Bread and
biscuits are the
major part of the bakery industry and covers around 80 percent of the total bakery
prod ucts in
India. Biscuits stands at a higher value and production level than bread. This
belongs to the
unorganized sector of the bakery Industry and covers over 70% of the total
production.

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
ready made 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 product 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 tonnes 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.
RESEARCH METHODOLOGY

TITLE-
Trend analysis of snack food market in India.

OBJECTIVE-
To know the trend of the snack food industry(biscuits and chips) in India To
observe the
taste and preferences of the Indian consumers towards snack food.

RATIONAL OF THE STUDY-

To observe the various players in the snack food market ,the developments
and the
variations being offered in order to survive in the growing competition in
this industry
.To know the growth ,penetration and the impact snack food market is able to
develop
among its Indian consumers.

DATA SOURCE-

Market research is generally either primary or secondary. Primary market research

is when a
company carries out research first hand. Primary market research is more reliable
than secondary
research because you know that the information you have gathered is accurate, as
you have
collected it yourself. It is also specific to your type of product/service. On the
other hand, it is
very time consuming and costs more, for example in consumer panels, products have
to be given
away for free so that they can be tested. This type of research can also be called
field research.
Some forms of primary market research are as follows:
Questionnaires/Surveys

Interviews (can be done one-to-one, in a group or over the internet)

Observation

Focus Group/Consumer Panel - asking customers how they feel about their products

In secondary research, the company uses information from other sources that has
already been
researched by somebody else. Instead of carrying out research yourself like in
primary research,
you simply use somebody else's results that have already been collected which have
been carried
out in similar ways to how you would have carried it out. The advantages of
secondary research
are that it is relatively cheap, easily accessible and can be done very quickly.
Disadvantages of
secondary research are that it is often not specific to your area of research and
the data used can
be biased and is difficult to validate. As you have not collected it yourself, you
cannot be sure
how accurate it is as it could be biased. This type of research can also be called
desk research.

Some forms of secondary market research are as follows:

 Websites
 Magazines
 News/Newspapers
 Textbooks
 Journals - specialist magazines
 Other companies financial report

Data, or facts, may be derived from several sources. Data can be classified
as primary
data and secondary data. Primary data is data gathered for the first time by
the researcher;
secondary data is data taken by the researcher from secondary sources,
internal or
external. The researcher must thoroughly search secondary data sources
before
commissioning any efforts for collecting primary data. There are many
advantages in
searching for and analyzing data before attempting the collection of primary
data. In
some cases, the secondary data itself may be sufficient to solve the
problem. Usually the
cost of gathering secondary data is much lower than the cost of organizing
primary data.
Moreover, secondary data has several supplementary uses. It also helps to
plan the
collection of primary data, in case, it becomes necessary. We shall
therefore discuss
secondary data first and then take up primary data.
Secondary data is of two kinds, internal and external. Secondary data –
whether internal
or external – is data already collected by others, for purposes other than
the solution of
the problem on hand.
Business firms always have as great deal of internal secondary data with them.
Sales statistics
constitute the most important component of secondary data in marketing and the
researcher uses
it extensively. All the output of the MIS of the firm generally constitutes
internal secondary data.
This data is readily available; the market researcher gets it without much effort,
time and money.

Sources of External Secondary Data – Examples. The Internet is a great

source of
external secondary data. Many published, statistics and figures are
available on the
internet either free or for a fee.
In research, Secondary data is collecting and possibly processing data by
people other
than the researcher in question. Common sources of secondary data for social
science
include censuses, large surveys, and organizational records (Mintel). In
sociology
primary data is data you have collected yourself and secondary data is data
you have
gathered from primary sources to create new research. In terms of historical
research,
these two terms have different meanings. A primary source is a book or set
of archival
records. A secondary source is a summary of a book or set of records.
Advantages to the secondary data collection method are - 1) it saves time
that would
otherwise be spent collecting data, 2) provides a larger database (usually)
than what
would be possible to collect on ones own However there are disadvantages to
the fact that
the researcher cannot personally check the data so it's reliability may be
questioned
Data can be defined as the quantitative or qualitative values of a variable.
Data is plural
of Datum which literally means to give or something given. Data is thought
to be the
lowest unit of information from which other measurements and analysis can be
done.
Data can be numbers, images, words, figures, facts or ideas. Data in itself
cannot be
understood and to get information from the data one must interpret it into
meaningful
information. There are various methods of interpreting data. Data sources
are broadly
classified into primary and secondary data.

Importance of Data and Data Collection

Data is one of the most important and vital aspect of any research studies.
Researches conducted
in different fields of study can be different in methodology but every research is
based on data
which is analyzed and interpreted to get information. Data is the basic unit in
statistical studies.
Statistical information like census, population variables, health statistics, and
road accidents
records are all developed from data. Data is important in computer science.
Numbers, images
and figures in computer are all data

Types of Data
Primary Data:
Data that has been collected from first-hand-experience is known as primary data.
Primary data
has not been published yet and is more reliable, authentic and objective. Primary
data has not
been changed or altered by human beings, therefore its validity is greater than
secondary data

Importance of Primary Data:

Importance of Primary data cannot be neglected. A research can be conducted without
secondary
data but a research based on only secondary data is least reliable and may have
biases because
secondary data has already been manipulated by human beings. In statistical surveys
it is
necessary to get information from primary sources and work on primary data: for
example, the
statistical records of female population in a country cannot be based on newspaper,
magazine
and other printed sources. One such source is old and secondly they contain limited
information
as well as they can be misleading and biased.

Sources of Primary Data:

Sources for primary data are limited and at times it becomes difficult to obtain
data from primary
source because of either scarcity of population or lack of cooperation. Regardless
of any
difficulty one can face in collecting primary data; it is the most authentic and
reliable data
source. Following are some of the sources of primary data.

Experiments:
Experiments require an artificial or natural setting in which to perform logical
study to collect
data. Experiments are more suitable for medicine, psychological studies, nutrition
and for other
scientific studies. In experiments the experimenter has to keep control over the
influence of any
extraneous variable on the results.

Survey: Survey is most commonly used method in social sciences, management,

marketing
and psychology to some extent. Surveys can be conducted in different
methods.Questionnaire: is
the most commonly used method in survey. Questionnaires are a list of questions eit
her open-
ended or close -ended for which the respondent give answers. Questionnaire can be
conducted
via telephone, mail, live in a public area, or in an institute, through electronic
mail or through fax
and other methods.Interview: Interview is a face-to-face conversation with the
respondent. In
interview the main problem arises when the respondent deliberately hides
information otherwise
it is an in depth source of information. The interviewer can not only record the
statements the
interviewee speaks but he can observe the body language, expressions and other
reactions to the
questions too. This enables the interviewer to draw conclusions
easily.Observations: Observation
can be done while letting the observing person know that he is being observed or
witho ut letting
him know. Observations can also be made in natural settings as well as in
artificially created
environment.

Secondary Data:

Data collected from a source that has already been published in any form is called
as secondary
data. The review of literature in nay research is based on secondary data. Mostly
from books,
journals and periodicals

Importance of Secondary Data:

Secondary data can be less valid but its importance is still there. Sometimes it is
difficult to
obtain primary data; in these cases getting information from secondary sources is
easier and
possible. Sometimes primary data does not exist in such situation one has to
confine the research
on secondary data. Sometimes primary data is present but the respondents are not
willing to
reveal it in such case too secondary data can suffice: for example, if the research
is on the
psychology of transsexuals first it is difficult to find out transsexuals and
second they may not be
willing to give information you want for your research, so you can co llect data
from books or
other published sources.

Sources of Secondary Data:

Secondary data is often readily available. After the expense of electronic media
and internet the
availability of secondary data has become much easier.Published Printed Sources:
There are
variety of published printed sources. Their credibility depends on many factors.
For example, on
the writer, publishing company and time and date when published. New sources are
preferred
and old sources should be avoided as new technology and researches bring new facts
into
light.Books: Books are available today on any topic that you want to research. The
use of books
starts before even you have selected the topic. After selection of topics books
provide insight on
how much work has already been done on the same topic and you can prepare your
literature
review. Books are secondary source but most authentic one in secondary
sources. Journals/periodicals: Journals and periodicals are becoming more important
as far as
data collection is concerned. The reason is that journals provide up-to-date
information which at
times books cannot and secondly, journals can give information on the very specific
topic on
which you are researching rather talking about more general topics.

Magazines/Newspapers: Magazines are also effective but not very reliable. Newspaper
on the
other hand are more reliable and in some cases the information can only be obtained
from newspapers as in the case of some political studies.

Indian snack food market—

Report Highlights:
The snack food market in India is $3 billion; with the organized segment accounting
for almost
half of the market share and growing at rate of 15 to 20 percent per year. However,
the imported
snack food market is growing but small ($30 million) due to high import duties, a
complex
distribution network and availability of relatively cheaper domestic snack foods.
Over the past
six years, exports of U.S. snack foods to India have grown almost ten times to $5
million in CY
2007. A growing economy, changing lifestyles, rise in disposable incomes and
preference for
quality products of U.S. origin will continue to fuel growth of imported U.S. snack
food items in
India.

SECTION I: Market Summary

Around 1,000 snack items and 300 types of savories of diverse tastes,
forms,textures, aromas,
bases, sizes, and fillings are sold in India

Potato chips and potato based products are by far the largest product category with
over 85
percent share ofthe salty snack market, followed by snack nuts, chickpea and other
pulse-based
savory snacks. Popcorn, diet snacks (soy nuts, bread sticks), breakfast
cereals,baked & roasted
snacks (biscuits, specialty breads, chocolate coated snacks, cookies etc.) and
cheese snacks are in
high demand across organized retail chains. Healthfoods, health food supplements
and
convenient foods are also rapidly growing segments.

As per an industry estimate, the branded and organized snack food segment dominated
by major
players such as Frito Lay, Con Agra, Kellogg‘s, Marico, Dabur, HLL, ITC, Parle,
Haldiram‘s,
Nestle, Britannia, Cadbury, Bikano and Balaji is estimated to grow by 15 to 20
percent per year;
whereas the growth of un-branded snack food is likely to grow modestly at 8 percent
per year in
the near future.

Product pricing for branded products are normally 15 to 20 percent greater than for
the un-
branded food segment due to higher overhead expenses. Snack food packaging ranges
from
35/40 gm sachets to 400 gm economy packs. Small packs work very well in India.

A biscuit (pronounced /ˈbɪskɨt/) is a baked edible product. The term is used to

apply to two
distinctly different products in North America and the Commonwealth Nations.

In the United States it relates to a small soft leavened bread, somewhat similar to
a scone.

In Commonwealth English, it commonly is used to refer to a small and hard, often

sweetened,
flour-based product, most akin in American English to a cookie, or sometimes in the
case of
cheese biscuits, a cracker.
India Biscuits Industry is the largest among all the food industries and has a turn
over of around
Rs.3000 crores. India is known to be the second largest manufacturer of biscuits,
the first being
USA. It is classified under two sectors: organized and unorganized. Bread and
biscuits are t he
major part of the bakery industry and covers around 80 percent of the total bakery
products in
India. Biscuits stands at a higher value and production level than bread. This
belongs to the
unorganized sector of the bakery Industry and covers over 70% of the total
production.

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
ready made 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 product 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 bisc uits in
the bakery
products. The total production of bakery products have risen from 5.19 lakh tonnes
in 1975 to
18.95 lakh tonnes 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.
Major players in the biscuit market-

2003- 2004- 2005- 2006- 2007-

2008-
Year
04 05 06 07 08
09

Annual Production(Lakh
11.00 12.54 14.29 16.14 17.14
19.5
MT)

INTERPRETATION-
We can see that the production has increased at an annual rate of 18% per
annum .This
shows the increasing demands and preferences turning in favors of biscuits,
across the
various years as shown in the data.Biscuit market in India ,a growing
industry facing
good competition and gaining attention.

Main Categories of Biscuits : Glucose, Marie, Sweet, Salty, Cream & Milk.
Glucose biscuits accounts for more than 50% of the total biscuit market
value, Parle G
dominate this market with more than 60% share followed by Britannia and ITC.

Brands :-
Major brands - The Indian biscuit industry is dominated by major brands like Parle,
Britannia,
and Sunfeast. Also the category has strong regional brands such as Priya Gold-
North, Cremica-
North & West, Dukes-South and Anmol-East & North.

Other popular brands Horlicks, Biskfarm-East, Rose-Andhra Pradesh & South, Sobisco-
East
and North East also launched in Andhra Pradesh and Madhya Pradesh., Nezone- North
East,
Bakewell.

Market Share Breakdown The Indian biscuit industry is dominated by brands like
Parle,
Britannia and Sunfeast.

Market Share Of Biscuits In India-2010

 Priyagold Others
6% 5%

Britannia
Britannia
Parle
ITC Sunfeast 37%
22% ITC Sunfeast
Priyagold
Others

Parle
30%

INTERPRETATION-
Market Leader Is Britannia with 37 % market Share.Parle is close competitor
to Britannia
in the growing market of biscuits.During last 2 years it has been seen that
ITC has
increased its share from 17 % to 22 %, it is because of its good marketing
strategies, good
quality & competitive pricing.Due to new entrants and change in taste of
customer
especially baked cookies the market share of the companies is fluctuating
from couple of
years

Consumption Pattern across Various Regions

Consumption of biscuits is even across the regions

INTERPRETATION
 We can see that the biscuit market across the various regions of the country
is evenly
distributed. A slight variation is seen across regions with the eastern
region having a
comparative lead(28%).This shows that the consumption is regular and good
all across
the country.

2009 – New Prospects in the Indian Biscuit Industry

GlaxoSmithKline Consumer Healthcare: Junior Horlicks Biscuits-toddler biscuit
category.PepsiCo India Launched biscuit brand Aliva, it will be produced by food
division Frito
Lay India.United Biscuits (UK), world‘s third largest biscuit company, is set to
enter India
market.Shakti Bhog plans to enter biscuits segment.

Biscuit industry is the largest segment of the grain milling industry and
constitutes about 55-60%
of the entire bakery range. In the past several years MNCs like Cadbury, Brooke
Bond and
Nestle tried to enter into the biscuit segment but were not successful. These
players found it
difficult to compete with the unorganised sector players in the lower / popular
segment of the
market in view of intense price competition. In the upper end of the market, the
market size was
small. With the de-control, several global players have entered the market and more
players are
expected to set up shop in the country. Infoquest India's report on the biscuit
market in India
gives the salient features of the industry in a clear and concise format.

MAJOR PLAYERS IN BISCUIT INDUSTRY

BRITANNIA
Britannia was incorporated in 1918 as Britannia Biscuits Co Ltd in Calcutta.In
1924, Pea Frean
UK acquired a controlling stake, which later passed on to the Associated Biscuits
International
(ABI) a UK based company. During the ‘50s and‘ 60s, Britannia expanded operations
to
Mumbai, Delhi and Chennai. Exports of sea foods started in the ‘70s. In 1987,
Nabisco, a well
known European food company, acquired ABI. In 1989, J M Pillai, a Singapore based
NRI
businessman along with the Groupe Danone acquired Asian operations of Nabisco, thus
acquiring controlling stake in Britannia. Later, Grop Danone and Nusli Wadia took
over Pillai‘s
holdings. In 1977, the Government reserved the industry for small scale sector,
whichconstrained
Britannia's growth. Britannia adopted a strategy of engaging contract packers (CP)
in the small
scale sector. This led to several inefficiencies at the operating level. In April
‘97, theGovernment
dereserved the biscuit sector from small scale. Britannia has expanded captive
manufacturing
facilities and has modernized and upgraded its facilities in the last five years.
It has also forayed
into the Dairy Business with the launch of Cheese, Butter, Ghee, Dairy whitener and
flavored
milk products.
Key Products Tiger, Good Day, Bourbon, 50-50, Treat, Milk Bikis, Marie Gold,
NutriChoice,
Timepass, Little Hearts

Parent Group
To Estimate the Biscuits Industry and identify the critical success
factorsBritannia's controlling
stake is jointly with Groupe Danone and Nusli Wadia.Groupe Danone is one of the
leading
players in the world in bakery productsbusiness. It acquired interest in Britannia
Industries in
1989 and acquired controlling stake in 1993..Nusli Wadia group is one of the
leading
industrialhouses in the country, with interests mainly in textiles and
petrochemicals.

Plant locations
Britannia's plants are located in the 4 major metro cities - Kolkatta, Mumbai,Delhi
and Chennai.
A large part of products are also outsourced from third party producers. Dairy
products are out
sourced from three producers -Dynamix Dairy based in Baramati, Maharashtra, Modern
Dairy at
Karnal in Haryana) and Thacker Dairy Products at Howrah in West Bengal.

Business
Britannia core businesses constitute of Bakery and Dairy products. Bakeryproducts
account for
90% of the revenues and include Biscuits, Bread and Cake & Rusk. Dairy products
contribute to
10% of Britannia‘s annual turnover of Rs13.38bn.

Over the years, Britannia has introduced and developed a full line of brands in all
segments of
the biscuit market. The company's Tiger range of glucosebiscuits have been a
runaway success,
enabling the company to expand itspresence in the largest gluco category of the
biscuit market.
In salty-sweet segment Parle‘s Krackjack and Britannia‘s Fifty-Fifty compete very
closely.

Britannia‘s other major brands include Marie, Thin Arrowroot, Bourbon, Milkbikis,
Nice, Snax,
Coconut Crunchies, Pure Magic, Good Day, Jim-Jam and Checkers. It has also launched
biscuits
like Vita MarieGold, Nutri-Choice etc, under the health positioning. Bakery
products major,
Britannia Industries, had a brilliant FY04.

The company reported over 11% topline growth during the year, where most of its
FMCG peers
found it tough to grow the topline. Focus on improving cost efficiencies aided
operating margin
expansion. The company finished FY04 with nearly 20% bottomline growth.

The key reason for the strength in topline is believed to be the increasing
affordability of branded
biscuits that aided volume growth. Moreover, the company's repackaged and
relaunched most of
its biscuit brands. This seemed to have kept the momentum going for Britannia.
Apart from
this,Britannia continued to focus on ways to bring down its costs. VRS and lower
cost of debt
has helped the company improve profitability.The hiving off of properties has led
to lower
depreciation provisioning. Thecompany also received an order in favour of closure
of its
Mumbai plant. The matter though is still sub-judice. After the break away from the
dairy
business, the company's cash flows seemed to have improved significantly.The
company
reported a strong 66% growth in other income, seemingly led by sale of the
company's mutual
fund investments. All this led to a 36% growth in profit before tax and
extraordinary items.

Threat from competition

The key threats for the company are the growing competition in the biscuit segment
and the
possibility of pricing pressures in the mass market.Competitors such as Parle-G and
Surya Foods
have already carved out a significant share in the mass market through aggressive
pricing, where
Britannia's brand, Tiger, is trying to enlarge its share. At the higher end of the
market too,
competition is hotting up, with players such as ITC rolling out new
extensions.Britannia's profits
in 2003-04 received a one-time boost from the cut in excise duty on biscuits. This
may not be
repeated this fiscalHowever, the company's new cost-reduction measures may help
alleviate
these pressures to some extent.
INTERPRETATION-
 The price of the company going up in the year from 540(approx.) to
621.it
signifies the strength the brand developed and the capitalization
it got in the given
year.

However, the company's new cost-reduction measures may help alleviate

these pressures
to some extent. The company has recently initiated proceedings to close
down its
Mumbai unit and set up new manufacturing facilities at Uttaranchal, which
will
significantly lower its excise and tax burden.Britannia Industries Ltd.
(BIL) is one of the
leading producers of biscuits and bakery products in the country. BIL‘s
marketing
campaigns riding on the cricket mania especially during the World Cup have
probably
been the most successful, which have added to its growth and visibility.
The findings of a
recent study conducted by a private channel have also rated Britannia as
the most liked
biscuit brand among kids.Union Budget 2003-04 halved the excise duty on
biscuits from
16% to 8%. Excise duty of 16% on biscuits was quite high and hence, BIL was
be the
biggest beneficiary of this excise duty reduction. This also took away some
of the pricing
advantage from the unorganized sector and the pricing differential between
the organised
and the unorganized sectors would also be bridged.

Last 5 years market of Britannia-

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

Sales

Turnover 1,817.92 2,317.11 2,617.66 3,142.89 3,424.58

Operating
Profit 200.96 128.69 232.32 224.16 204.06

INTERPRETATION-
 The sales of the company has almost doubled in the last five
years.it reflects the
success of the company and also the changes in the tastes and
references of the
consumers which are in favor of the snack food market and the
company.
  The company has shown consistent improvement in its sales in the
consecutive
years.
 Its operating profit has been low ,because of the high competition and
the threat
from new entrants.

BIL HIGHLIGHTS:
 BIL‘s biscuit volume growth has outpaced the segment driven by the various
initiatives
taken by the management. Tiger biscuits launch in July 1997 led Britannia‘s
foray into
the glucose category. Tiger now contributes about 40% to the biscuits
turnover and has
been Britannia‘s biggest success.

 BIL has decided to focus on seven core brands in the biscuits and
akerycategory. The
brands include Good Day, Tiger, 50-50, Snax, and the Cream Treat brands,
among
others. Last year, the company acquired wality biscuits. Maska Chaska, the
snack biscuit
extension of Britannia's 50-50, is selling more than the mother brand in
certain markets
like north Karnataka. And in doing so, Maska Chaska is contributing nearly
30% to the
mother brand 50-50's total sales across the country.

 To establish a presence at various points of consumer visits, the company is

now in talks
with specialty coffee outlets and petrol pumps to place its products at
strategic sites.

 Britannia, which has agreed in-principle to acquire a 49% stake in Kwality

Biscuits and
Snacko Bisc, has the option of hiking the holding in the two companies to
100%. The
company had acquired Kwality Biscuits and Snacko Bisc to increase its
presence in the
southern market. Britannia is expected to complete the acquisition of the 49%
stake in
Kwality Biscuits and Snacko Bisc by the end of the current fiscal.

 The effect of a poor monsoon last year is not likely to affect growth
significantly.
Though, Britannia derives close to 40% of its sales from the rural markets,
the biscuit
category is likely to be more resilient compared
  Other factors, which support its higher-than- market growth are the
existence of relatively
smaller players like Bakeman‘s and Nutrine within the rganised sector that
continue to
be soft targets and the aggressiveness of Britannia.

PARLE
A long time ago, when the British ruled India, a small factory was set up in the
suburbs of of
Mumbai city, to manufacture sweets and toffees. The year was 1929 and the market
was
dominated by famous international brands that were imported freely. Despite the
odds and
unequal competition, this company called Parle Products, survived and succeeded, by
adhering
to high quality and improvising from time to time. A decade later, in 1939, Parle
Products began
manufacturing biscuits, in addition to sweets and toffees. Having already
established a reputation
for quality, the Parle brand name grew in strength with this diversification. Parle
Glucose and
Parle Monaco were the first brands of biscuits to be introduced, which later went
on to become
leading names for great taste and quality.

Key Products : Parle - G , Hide and Seek ,Krackjack ,Hide & Seek Milano ,Magix
,Digestive
Marie ,Monaco ,Parle Marie ,Kreams ,Milk Shakti ,Parle 20-20 Cookies ,Golden
arcs ,Nimkin
,Kreams Gold ,Chox ,Monaco Jeera

The strength of the Parle Brand

Over the years, Parle has grown to become a multi- million US Dollar company. Many
of the
Parle products - biscuits or confectionaries, are market leaders in their category
and have won
acclaim at the Monde Selection, since 1971. Today, Parle enjoys a 40% share of the
total biscuit
market and a 15% share of the total confectionary market, in India. The Parle
Biscuit brands,
such as, Parle-G, Monaco and Krackjack and confectionery brands, such as, Melody,
Poppins,
Mangobite and Kismi,enjoy a strong imagery and appeal amongst consumers. Be it a
big city or
a remote village of India, the Parle name symbolizes quality, health and great
taste! And yet, we
know that this reputation has been built, by constantly innovating and catering to
new tastes.
This can be seen by the success of new brands, such as, Hide & Seek, or the single
twist
wrapping of Mango bite. In this way, by concentrating on consumer tastes and
preferences and
emphasizing Research & Development, the Parle brand grows from strength to
strength.

The Quality Commitment

Parle Products has one factory at Mumbai that manufactures bisc uits
&confectioneries while
another factory at Bahadurgarh, in Haryana manufactures biscuits. Apart from this,
Parle has
manufacturing facilities at Neemrana, in Rajasthan and at Bangalore in Karnataka.
The factories
at Bahadurgarh and Neemrana are the largest such manufacturing facilites in India.
Parle
Products also has 14 manufacturing units for biscuits & 5 manufacturing units for
confectioneries, on contract. All these factories are located at strategic
locations, so as to ensure a
constant output & easy distribution. Each factory has state-of-the-art machinery
with automatic
printing & packaging facilities.All Parle products are manufactured under the most
hygienic
conditions.Great care is exercised in the selection & quality control of raw
materials,packaging
materials & rigid quality standards are ensured at every stage of the manufacturing
process.
Every batch of biscuits & confectioneries are thoroughly checked by expert staff,
using the most
modern equipment.

Last 5 years market of Parle-

2005 2006 2007 2008

2009

SALES (crores) 750.64 1004.57 1405.31 1554.74

2115.86

PROFIT 86.50 86.85 83.28 137.0

92.74

INTERPRETATION-
The sales of Parle have been shooting up .It has tripled itself in just the
span of three
years .in the year 2009 ,it had gone up by 30% .hence ,it reflects the
changes in the eating
habits (consumption) of Indians.Parle g is the largest selling gluco biscuit
company in the
world .Biscuits have been widely accepted as a complementary serve during
tea-time
(morning & evening).they are ready to eat, instantaneo1usly consumable.The
profits of
Parle has been growing slighty across the years ,but has fallen sharply in
the year 2009
because of the various new entrants in the segment and competitive pricing.
Market has
got an eye on this segment because of its increasing demands and
growth.Market
capitalization of the company has also witnessed a huge growth .
The Marketing Strength
The extensive distribution network, built over the years, is a major strength for
Parle Products.
Parle biscuits & sweets are available to consumers, even in the most remote places
and in the
smallest of villages with a population of just 500.Parle has nearly 1,500
wholesalers, catering to
4,25,000 retail outlets directly or indirectly. A two hundred strong dedicated
field force services
these wholesalers & retailers. Additionally, there are 31 depots and C&F agents
supplying goods
to the wide distribution network.The Parle marketing philosophy emphasizes catering
to the
masses. They constantly endeavour at designing products that provide nutrition &
fun to the
common man. Most Parle offerings are in the low & mid-range price segments. This is
based on
their cultivated understanding of the Indian consumer psyche. The value- for- money
positioning
helps generate large sales volumes for the products.However, Parle Products also
manufactures a
variety of premium products for the up- market, urban consumers. And in this way,
caters a range
of products to a variety of consumers.

PRIYA GOLD BISCUITS

TOUGH cookie. The term sits well on the shoulders of Shekhar Agarwal,Director of
the Rs 150-
crore, Delhi-based Surya Food & Agro Ltd, the company behind the Priyagold brand of
biscuits.
Unfazed by the muscle of big-ticket competitors such as Britannia and Parle,
Agarwal modestly
tells Catalyst that the reactive strategies adopted by his competitors speak for
themselves.

A decade of being in the business has got Priyagold the perception of being a brand
name to
reckon with in the Northern region, a distribution network that has helped the
brand chart its way
in Western India as well, and recognition for quality production from Surya Food &
Agro's
manufacturing plant at Surajpur (Greater Noida) in Uttar Pradesh. And while all
these factors
have played significant roles in getting Priyagold where it is today, is its
competitive pricing that
remains his brand's main strength.A fact acknowledged by FMCG analysts.

"It is a matter of concern that regional players such as Priyagold offer products
at retail prices
that are almost half that of established players such as Britannia. The product
offerings from such
regional players may not necessarily be innovative on taste, but are priced very
aggressively and
do not compromise on quality," observes an FMCG analyst. Some of Britannia's
products such
as Marie,Good Day and Milk Bikis, for example, have been the victims of this
strategy,
registering some decline in market share in recent months, according to an AC
Nielsen
report.This trend is highlighted more in semi-urban and rural markets, known to
occupy a
significant share of the overall Rs 3,000-crore domestic biscuit market. In fact,
close to 70 per
cent of Priyagold's sales are accounted for by semi-urban rural markets, and the
skew is expected
to continue in favour of these markets.
On the other hand, intensified competition from regional players has led the
established Britannia
and Parle to squeeze their profit margins, offerproducts at various price points,
introduce small
pack sizes, and offer aggressive marketing promotions. And even as the battle
royale continues
between Britannia and Parle on a national level, Surya Agro now claims market
leadership in the
non-glucose biscuit segment, which, according to industry estimates, accounts for
30 per cent of
the overall biscuits market.For all practical purposes then, Priyagold is hot
property, especially
for first time entrants in the biscuits category. Surya Food & Agro has been
approached several
times by FMCG multinationals, with proposals of either acquiring the Priyagold
brand, or
forging strategic alliances with the company.

It is very difficult for any company to enter the domestic biscuits market .First,
consider the
competition. Britannia and Parle are very aggressive nationally, in the East Priya
Biscuits is
tough competition for any new player, while Duke is strong in the South. Then, of
course, there
is Priyagold. Yet another player is Bakeman's. The second reason is that margins
have to be
incurred at dealer, distributor and stockist levels. Then there are other factors
such as large
investments involved in manufacturing and brand building. It makes it easier for
any company
wanting to enter this segment ,therefore, to buy out an existing brand.

Recent times have thrown up examples of several established FMCG players going slow
on
biscuits. Kellogg's recently stopped active production of biscuits, Dabur has ruled
out an entry
and Nestle SA sold off the assets of Excelsia Foods some months ago. There has been
talk of
Hindustan Lever, too, extending its Modern brand to biscuits, but nothing has been
announced
yet.

Surya Food & Agro, meanwhile, appears to be going full steam ahead. The company now
proposes to take on Britannia on its own turf. Their strongholds are Uttar Pradesh,
Punjab and
Haryana, but they plan to foray into the Southern market by the end of the current
calendar year,
beginning with Karnataka. Surya Food intends to subsequently set up a manufacturing
unit in the
State.

Up North, plans to set up a fresh manufacturing facility in Greater Noida next

financial year are
currently being finalised. The proposed investment in this plant will be about Rs
20 crore,.
Production in full swing is expected to begin by the end of this month at the
company's third
manufacturing base, in Lucknow. The Lucknow plant, set up on an investment of Rs 5
crore,
commenced production about two months ago. Consolidation of production is obviously
a
significant strategy for the company now, with its existing manufacturing bases in
Surajpur with
seven biscuit lines and Faizabad, a franchisee unit, in place. On the product
front, 23 varieties of
biscuits are currently being produced by the company, and there is a plan to foray
into salty
biscuits next year.

In the current fiscal, meanwhile, expect more of last year's Hak se mango
advertising, complete
with its small-town appeal. Surya Food plans to hike its consolidated ad spend to
Rs 8 crore this
fiscal, against the Rs 5 crore spent on advertising last year On the exports front,
the company
plans to take its Priyagold brand to markets such as Dubai, Muscat and Oman. The
Priyagold
story, which began in late 1993 as a family business led by entrepreneur B. P.
Agarwal on an
investment of Rs 1.5 crore, doesn't seem to be playing second fiddle to anyone.
With a target of
doubling sales turnover to Rs 300 crore in the current fiscal, the cookie certainly
isn't crumbling
for Priyagold.

Other prominent players:

Biscuits

CRTICAL ANALYSIS OF ITC‟S BISCUITS

ITC BRANDED BISCUITS

Continuing its pursuit to expand into other segments to reduce dependence on the
core business
of cigarettes, ITC's foods division launched the `Sunfeast' range of high quality
biscuits with
offerings in Glucose, Marie and Cream segments after 12 months of product research
and
development and extensive sampling across 14,000 consumers across all POP group
nationally.
It was launched nationally in phases in over One million retail outlets across the
country.
They believe that their understanding of the Indian consumer is reflected in the
increasing
confidence in the ITC brand and more importantly the trust that Indian consumers
are reposing in
all their products.

The company however, outsourced the entire production from two units at Burdwan and
Nagpur
instead of setting up its own manufacturing line. The current capacity of the
Burdwan unit is 700
tonnes a month. They want to emerge as the third largest player in the organised
biscuit market
after Britannia and Parle in the next three to four years with a market share of
10-11 per cent of
the organised market. It was hoped that the turnover of the foods division would
jump to Rs.
450-500 crores in the next four years with biscuits alone contributing close to Rs.
150-200
crores. They are also looking at two more outsourcing arrangements in Western and
Southern
India considering that the value added range market was growing at 10 per cent
annually.The
Sunfeast range is competitively priced and includes two new product innovations —
orange
flavoured Marie and Butterscotch flavoured cream biscuits launched for the first
time in the
Indian market.

'Sunfeast Biscuits' – Offerings

Sunfeast Glucose Biscuits deliver the Natural Goodness of Wheat and is available in
100 gms, 75
gms and 19 gms priced at Rs. 4, Rs. 3 and Re 1 respectively, targeting children
between the age
group 4 – 14 years and their mothers.

Sunfeast Orange Marie – a very differentiated offering is available in 200 gms,

priced at Rs. 13
and 'Sunfeast Marie Light' – Light & Crispy, available in 200 gms and 400 gms,
priced at Rs. 13
and Rs. 24 respectively. Targeting housewives.

Sunfeast Orange Cream, Sunfeast Butterscotch Cream & Sunfeast Bourbon Cream –
Smooth &
Yummy Cream Biscuits, available in 100 gms, priced at Rs. 11, Rs. 11 and Rs. 12
respectively.
Targeting children between the age group 4 – 14 years. The launch of ―Sunfeast‖
marked ITC
Foods entry into the branded biscuit market with a range of offerings in both basic
and value
added segments 'Sunfeast', with the Brand Essence ―Spread the Smile,‖ connotes
happiness,
contentment, satisfaction and pleasure one would derive from the biscuits.

The brand positioning and imagery is reinforced by the Sun mascot conveying the
emotional and
gratifying aspects of the product.
This latest offering from ITC Foods is in tune with the company‘s strategic
direction to develop
new product lines by synergising its proven competencies. The entire range of
'Sunfeast Biscuits'
is packed in vibrant colours, distinctive graphics and fonts identifying sub
categories and at the
same time, maintaining a consistent look of the umbrella brand ―Sunfeast‖. The
brand is
supported with Television campaigns across National and Vernacular media – that is
distinct,
highlighting the product attributes, quality and the new – first time in the market
offerings from
Sunfeast. During the launch phase, Consumer promotions were conducted across retail
outlets.

ITC TASTES SUCCESS IN BISCUITS

The company's success in the food products business is attributed to the

depth in its distribution network, ability in brand building and in identifying

quality outsourcing opportunities.

THOUGH the ITC brand is almost synonymous with tobacco, it has in no way weighed
with the
people purchasing products of ITC's Foods division and the company has been able to
capture
nearly 10 per cent of the market share for biscuits within a year of the launch of
`Sunfeast' range
of biscuits.

The biscuits market, which witnessed a growth of 12 per cent during last year in
the country, is
expected to sustain its growth during the current year, too. The biscuits market in
the country
was estimated to be worth Rs 4,500 crore annually and in terms of quantity it was
around 5.12
lakh tonnes. While the organised, branded segment had a 60 per cent market share
the rest was
accounted for by the unorganised sector. Maharashtra and Uttar Pradesh were two of
the largest
markets for biscuits and Tamil Nadu, with 9 per cent market share, was ranked
third.

ITC Foods division launched biscuits in three segments - Glucose, Marie and Cream -
and it was
the first to come out with two new flavours – Orange Marie and Butterscotch Cream
biscuits.
While in the rural markets Glucose biscuits do well, in the urban markets it is the
cream biscuits
segment.

ITC clearly demarcated its two businesses and food products were sold through
groceries/departmental stores that did not deal in tobacco products. Hence there
was no
hesitation on the part of the consumers to accept biscuits, ready-to-eat food
products and
chocolates marketed by ITC through its Foods Division despite the fact that ITC as
a brand has
long been associated with tobacco.

The company's success in the food products business is due to the depth in its
distribution
network, ability in brand building and in identifying quality outsourcing
opportunities. ITC
entered the biscuits market in August 2003 and it has introduced its products in
Uttar Pradesh,
Maharashtra, Kerala, etc. The `Sunfeast' brand of biscuits have been able to
capture a 10 per cent
market share where they have been launched. In Coimbatore, by the end of 2004-05,
it would
garner 20 per cent of the biscuit market. The market for biscuits is to be good
since the per capita
consumption of biscuits was just about 10 kg in India where was it was 100 kg in
countries like
the US and even China.

Moreover, from being essentially a favourite of children , biscuits are emerging as

a preferred
snacks to be consumed with coffee or tea and this wider consumer choice promised
growing
demand for them. ITC expects maximum sale of biscuits in west India which will
cater to around
29 per cent of the company‘s total biscuits sales. The share of east and south will
be somewhat
similar at around 23 percent .During the current financial year, the company‘s food
division will
concentrate mainly on strengthening of its distribution network. They are looking
at sales or
profit right at this moment. Their primary aim now is to make their products
available in all
corners of the country. The company has no plans to go for export of biscuits in a
big way
immediately.

Key Products : Sunfeast Milky Magic ,Sunfeast Marie Light ,Sunfeast Golden Bakery
,Sunfeast Dark Fantasy ,Sunfeast Dream Cream ,Sunfeast Snacky ,Sunfeast sweet 'n
salt
,Sunfeast Nice ,Sunfeast Benne Vita Flaxseed Biscuits ,Sunfeast Special

DISTRIBUTION NETWORK OF ITC

MOVE over supermarkets, departmental stores. The friendly neighbourhood panwallah

play a
major role in the corporate sector what with ITC Ltd‘s food division banks on this
segment to
give it the winning edge in the war to win the loyalty of Indian palates.ITC
leveraged its proven
strength in retailing especially through the panwallah segment with which it is
particularly
familiar, thanks to its cigarette business, to emerge as a leading player in the
branded biscuits
market which it entered barely over month ago.

While grocery stores remained a large part of the retail rollout plan, growth for
them came from
the neighbourhood convenience stores and panwallahs who are familiar with company
and
brands. The biscuits are now available cross the country through such outlets.
While making
inroads into retail has remained a tough challenge for many MNCs, ITC seems to have
cracked
the complicated code if you consider the fact that in a place like Pune, for
example- it services
four thousand such outlets on a daily basis with the figure increasing to over two-
and-a-half lakh
across the State.

The company has already set in motion a multi-crore brand-building and promotion
exercise for
its foray into the biscuits business. At stake is a Rs 2,700-crore organised market
for the product,
which is currently dominated by Britannia and Parle, which currently account for
over 80 per
cent of the market. The company‘s brand strategy seems to be based on giving
established
favourites like Marie and cream biscuit segment a new interpretation to seduce
palates. Thus,
while the Marie takes on a new, orange flavoured avatar, the company is hoping to
lure Indian
biscuit lovers with an all-new butterscotch cream avatar for the latter, under its
‗Sunfeast‘.
Flavour innovation will lead growth in the cream segment and we willcontinually
look at
launching value-added products to gain leadership position .Whether the panwallah
will
smoothen the journey to number one position remains to be seen but the company is
already
claiming that it has got 4-5per cent of the 600-700 tonnes/month Mumbai market just
one month
into the launch.The company is already launching the product across various cities
and plans to
make the brand a national one in the next few months. That is also planning to
offer trade
margins that will give competition a run for its money will, no doubt, help.It also
continues to
build its IT-backed rural distribution infrastructure in support of its FMCG growth
strategy
because the distribution reach of this ebiz is more important than its revenue –
earning potential.

This is important for India because distribution of products and services to the
hinterlands of
India is a daunting task, and this is the bit that most FMCGs as well as the cola
majors are
struggling with.

VIEW OF INDIAN BISCUIT INDUSTRY-

It is now a booming market because it is not restricted to small children but also
to aged
person.The increase in purchasing power of buyers have bound them to change the
company‘s
strategies.

There is a significant difference between preferences of biscuits among different

customers
according to taste, quantity purchased, income, family size and age group.

RECOMMENDATIONS FOR THE INDIAN BISCUIT INDUSTRY-

A good pricing strategy must be adopted Necessary product differentiation
required
Quality should be enhanced There must be more quality variants of the weaker
companies in the market Try to adopt competitor‘s strategies at times,
whenever required
The number of effective advertisement should be increased Health oriented
biscuits
should be introduced.

CHIPS MARKET OF INDIA-

Potato Wafers and Chips

General Overview
In India around 12 million tonnes of potato is grown which is
about 4% of the total world production. However, the per capita
consumption of potatoes is low. Potato is probably the most
popular food item in the Indian diet. It is grown all over the
country with Uttar Pradesh growing the maximum quantity.
Potato is a very rich source of starch. It also contains phosphorus,
calcium, iron and some vitamins.

It is estimated that 25% of the potatoes, which are spoiled due to

various reasons such as transportation, type of packing, non-
availability of cold storage capacities during harvesting season,
glut in the market etc., could be saved by making various
preserved potato products. Potato wafers and chips are one such
products. Potato wafers and chips are thin slices of potato, fried
quickly in oil and then salted

A Brief History of Potato Wafers and Chips

According to snack food folklore, the potato chips
and the wafers
were the fanciful creation of a certain chef
called George Crum.
He apparently invented it in 1853 in his
restaurant - Moon's Lake
House in Saratoga Spring, New York. The urban
legend goes like
this that George Crum was angered when a customer
returned his
french fried potatoes to the kitchen for being too
thick, Crum
shaved them paper thin and sent the plate back
out. And thus
came it being the Potato Chips and Wafers.

Market Potential of Potato Wafers and Chips

Potato Wafers and Chips are one of the most
celebrated in the
Ready To Eat munchies market, relished in almost
all the parts
of the world.

In India it is being produced not only on large scale by big firms, but also on
cottage/home scale
in semi-urban and rural areas. Owing to this, there is a number of companies from
both the
organized as well as unorganized sector who are already catering to the needs of
tea stalls,
restaurants, railway stations, tourist places etc. Still there is a huge demand to
be met for these
products in interior and remote places in different parts of the country.
There exists consumer as well as bulk markets for potato wafers
and chips even in far flung rural areas owing primarily to the
following reasons:-

 Rapid urbanisation and improving standards of living

 Easy availability
 Convenient packaging
 Affordable prices
 Nutritious values

Though there exists some international as well as national brands but majority of
the market base
is under the control of local manufacturers. With proper strategy and network, it
is possible to
penetrate the market.

Potato chips show no sign of declining in popularity. However, the public's

increased demand for
low-fat foods has put manufacturers on a fast track to produce a reduced-calorie
chip that pleases
the palate as well.

Equipments Used In The Production Process

For the production of good quality chips, the potatoes should have less sugar
content. Whenever,
cold stored potatoes are to be used for chips making, those potatoes should be
brought to the
room temperature and be used only after 24-48 hours.

The equipments and gadgets used for the above processing are easily available
locally and they
include potato slicer, peeler, blancher made of aluminium or stainless steel,
dehydrator, deep fat
frier, basket sieve, pouch sealing machine and weighing scale.

The Manufacturing Process

The simplest chips of the kind that are just cooked
and salted, but
manufacturers can add a wide variety of seasonings
of herbs,
spices, cheese or artificial additives. Potato
wafers must be
manufactured in a scientific manner and under
hygienic
conditions. The production process mainly comprises
of the
following steps:-

Washing and Peeling - Fully grown and ripe potatoes

are firstly
thoroughly washed before peeling them with the help
of a peeler.
Then these potatoes are trimmed and put in brine
water for 30-35
minutes to prevent browning
Slicing and Blanching - Afterwards they are cut in the required sizes on slicing
machine. These
slices are blanched in boiling water

Drying and Frying - Then the blanched potatoes are placed on drying trays which are
then put
in the drying machine. Temperature of dryer is maintained in the range of 140 to
150O F. After
drying, they are fried in edible oil to make them crisp and brown.

Packaging - The fried potato wafers are then kept on the sieve to remove excess of
oil, cooled
and other ingredients like salts, spicy mixture is sprayed as per required taste.
Cooled potato
wafers are then packed in polythene bag.

Quality Control Process

Preventing breakage must be a primary goal of the producer and to ensure minimum
breakage
companies should install safeguards at various points of the production process

The color is compared to charts that show acceptable chip colors across the
processed food
industry norms

The quality inspectors should also check the chips for salt, seasoning, moisture,
color, and
overall flavor.

Popular Flavors of Potato Wafers and Chips

Over the years potato wafers and chips have continued to evolved, with a steady
increase in
kinds of flavors. Few of the most popular flavors across the world are as follows:-

1. Plain
2. Ready Salted
3. Salt and Pepper
4. Salt and Vinegar
5. Worcestershire Sauce
6. Tomato Sauce (ketchup flavor)
7. Sour Cream and Onion
8. Barbecue
9. Kimchi
10. Garlic
11. Chili
12. Chicken.

Global Perspective for Potato Wafers and Chips

The rise of the 'snacking' phenomenon is now fairly well documented on an
international scale,
although the rate and extent of development do vary from country to country. With
the
breakdown of formal meals, consumers are increasingly tending to eat a number of
smaller
snacks during the day rather than three full meals. Furthermore, in an increasingly
fast paced
financially well-off society there is growing demand for snacks that are easy to
buy, store and
eat, with an increasing number being eaten 'on the move'. With this background, the
potato
wafers and chips market seems to hold good growth prospects. According snack market
analysis,
potato chips account for an average of 35% of the total savory snacks market.

Wish Chip
A wish chip is any potato wafer or chip that has somehow become folded in half
during the
production process. It is so believed by some in different parts of the world that
if you make a
wish while having such a half folded wafer then it is granted. The ritual involves
of fitting the
whole chip in one's mouth and then chewing it either before, after or while the
wish is made, the
timing and manner in which the wish is made is highly variable and changes from
region to
region.

INTRODUCTION OF LAYS:

Frito-Lay North America (FLNA) is a division of PepsiCo, Inc. which manufactures,

markets and sells a variety of corn chips, potato chips and other snack foods.

FLNA is headquartered in Plano, Texas, a suburb of Dallas. The company's current

form is the
result of a 1965 merger of Frito-Lay, Inc. and the Pepsi-Cola Company, which
resulted in the
formation of PepsiCo, Inc. Products sold under the Frito-Lay name are now recorded
by two
PepsiCo divisions: Frito-Lay North America (North American sales) and PepsiCo
International
(international sales)

Lay‟s - Be a Little Dillogica

Brand History
Lay‟s - world‟s largest and favorite snack food brand, has also steadily
established itself as an indispensable part of the “snacking culture” in India
since its launch in
1995. Lay‘s, with its irresistible tastes, international & Indian flavors and young
imagery has
established itself as a youth brand and continues to grow in the hearts and mind of
its consumer!

Over the years, Lay's has been known for its engaging & innovative promotions and
campaigns.
The brand known for its "No one can eat just once " campaign has moved it's
positioning to
"what's the program?" making Lay's - the main food of every program! Saif Ali Khan,
has
been the face of the brand for over 5 years. He has recently been joined by the
captain of the
Indian Cricket Team M.S Dhoni - both embodying the youthful appeal and energy of
the brand.

In 2008, Lay's launched a never before "Fight for your Flavor" allowing consumers
vote for the
flavor of their choice and the flavor with the maximum votes continues in the
market. The
flavors have been selected by the Lay's brand ambassadors - Saif Ali Khan and M S
Dhoni - with
each celebrity rooting for the flavor of their choice.

In Nov 2008, Lay's Chip-n-Sauce pack is yet another breakthrough innovation by the
Lays. The
pack has been launched for cricket lovers to savor the best of the season with this
first to market
innovation. Lay's Chip- n-Sauce large pack is introduced in two unique flavors
Chilli Chinese
with Schezwan sauce sachet and Chatpata Indian with Tamarind sauce sachets inside
the pack.

In June 2009, Lay's launched its new positioning platform - Lay's be a little
Dillogical. The new
Dillogical concept makes a strong connect with youth caught in the divergent
pressures of the
desire to succeed and the desire to stay actively engaged with those life filling
moments. This
friction is like a game between the heart and the head, a struggle between what you
wish to do
versus what you have to do. It is all about making things that matter to the heart,
happen.

In 2006, Lay's launched the first pre mium irresistible cris p, Lay's Stax. These
perfectly
shaped bite-sized crisps come in 6 irresistible, international flavors. These
crisps are stacked in
shareable tray, in a trendy can! Lay's Stax caters to the tastes of the Global
Indian citizen, who
has an evolved palate. But don't just take our word for it - go grab your Stax now!

. KURKURE-

Kurkure - Tedha Hai Par Mera Hai

Brand History
Launched in 1999 , this perfect 'namkeen' snack, fully developed in India, has
become the torch
bearer of fun and lovable human quirks. It developed an even stronger identity
through celebrity
associations with Juhi Chawla [2003] and Kareena Kapoor [2008], well-known actors
in Indian
Cinema.

About the Brand

Brand Promise
Kurkure is a crunchy new age namkeen snack brand which symbolizes light
hearted fun.
Embodying the spirit of India, Kurkure has found a home in the hearts & minds of
all and enjoys
the position of a strong Lovemark brand in Ind ia. The spirit and twinkle of Juhi's
personality
complements and embodies what Kurkure stands for. Over the years, Kurkure has
journeyed
effortlessly from being a snack with a twist to being an integral part of the tea
time menu to
being an embodiment of lovable human 'imperfections' or 'tedhapan'.

Brand Advantage
 Cooked in RBO (Rice Bran Oil), Kurkure has 40% less Saturated Fat, Zero
Trans Fats
and No Added MSG. All the raw materials used in Kurkure comply with the
Prevention
of Food Adulteration Act and Rules that govern the manufacture, distribution
and sale of
Kurkure. All ingredients are such that are used daily in all households
today for
preparation of various edible items.

Innovations
Kurkure has constantly re-invented to keep itself relevant to the Indian ethos and
culture. Not
only has Kurkure provided an inimitable taste and superior quality, but it has also
strived to do
more for its consumers. It has brought fame and joy to many through its 'Chai-
time-achievers'
face on pack initiative. Kurkure continues to associate itself with Indian families
and has
launched a new engagement program around ―spending time with families‖ this year.
From an
innovation standpoint, Kurkure has launched an ingredient innovation with the
launch of
Kurkure made with Rajma in 2010.

Kurkure Desi Beats

Kurkure Desi Beats is an exciting new range of crunchy snacks offering irresistible
Indian tastes
using authentic Indian ingredients like corn and wheat. This sub-brand personifies
the inherent
‗Desi‘ (Indian) spirit in all of us. Kurkure Desi Beats celebrates the contemporary
Indian youth
who straddles both tradition and modernity and is confident in his Indian identity.
The sub-brand
has recently launched two new flavours in a new rectangular shape.

Quality Standards -
Kurkure is made in automated plants in three locations. These are in Channo
(Punjab), Kolkata
and Pune. These plants are also audited and certified by various external agencies.
These
certifications include:

A .HACCP (Hazard analysis and critical control point)

B .Certification by TQCSI (Australia) , which confirms that products are

manufactured in Food
safety environment and manufacturing has adequate controls to ensure product
tracking.

C .American Institute of Baking (USA) , one of the best auditing body which
confirms process
and product safety.

D .Our Plants are ISO 14000 certified which confirms that the manufacturing process
ensures
environmental safety.
E .Our plants are also certified to ensure that the product, process, environment
and people safety
have been maintained at very high level and this certification is issued by OHSAS
18001-
(Occupational Health and Safety Assessment Series) - (USA).

QUICK BRAND FACTS

 Launched in India in 1999.
 Kurkure Desi Beats; an exciting new range.
 Kurkure has 40% less Saturated Fat, Zero Trans Fats and no added MSG .

Haldiram :
EVOLUTION :
EVOLUTION 1937 – Bikaner 3 units till 90s – Kolkatta, Nagpur & New Delhi. First
Mover
Advantage – Branded Namkeens & Technology in Packing. Traditional Indian Food –
Hygiene
& Quality Competitors – Unorganized market, Frito Lays India, SM foods, Bakemans,
etc.

STRENGTHS AS BRAND :
STRENGTHS AS BRAND First Mover Advantage Product Quality & Hygiene Value for
Money Products Rich Cultural Heritage – Exchange of Gifts Strong Distribution
Network
Hoardings for Promotion For all Age Groups Various Awards of Recognition

MARKET STRUCTURE :
MARKET STRUCTURE SUBSTITUTE PRODUCTS Potato Chips Biscuits Fast Food & Sweet
Shops Popcorns & Peanuts Home Made Preparations INDUSTRY COMPETITORS Pepsi
Foods & Frito Lays Bakeman‘s Nathu‘s Evergreen‘s SM Foods Britannia Unorganised
Players
SUPPLIERS Farmers Manufacturers Units Other Vendors C&F Agents Distributors Semi
Wholesaler Retail Shops & Paanwalas BUYERS Corporate Offices Households Restaurants
&
Eateries Canteens & Factories POTENTIAL ENTRANTS Existing Industry Competitors
Small
Regional Players International Players

PRODUCT :
PRODUCT Scope – Exhaustive Range of RTE Products Attributes / Benefits Packaging
for
longer shelf life & freshness Various price points & reasonable State of art
manufacturing
technology Easy availability Quality / Value – Good quality at competitive prices
Uses – Filler
between meals For serving to guests

BRAND :
BRAND Users – Gourmets having inclination towards Indian meals Country of Origin –
Bikaner
Organization Associations – Innovative & High quality products Brand Personality –
―Maharaj‖
known for lip-smacking dishes Symbol – Written in golden for richness & purity
Brand
Customer relationship – Indian taste at anytime Emotional Benefits – Smart purchase
of high
quality & hygienic products

BRAND IDENTITY SYSTEM :

BRAND IDENTITY SYSTEM Value Proposition – Functional Benefits – Taste, Hygiene,
Consistent Quality, Best Packaging, Freshness, Extensive Product Range Emotional
Benefits –
Smart Buyer, Association with Indian Roots Credibility – Makes Ready-To-Eat that
are tasty
and hygienic

BRAND PERSONALITY :
BRAND PERSONALITY ―Maharaj‖ known for lip-smacking dishes Male of 40 yrs old of
middle or upper middle class A person found of food, jolly, old-fashioned, down-to-
earth,
honest, wholesome, real and authentic Image of sincere, experienced, skilled
genuine and older
brand Well liked and respected member of the family High quality & rich parentage

POSITIONING :
POSITIONING To the consumers having inclination towards Indian meals, Haldiram‘s
offers
ready to eat high quality readily available Indian snacks, with excellent packaging
which
provides increased shelf life to its products.

Sales Organization Structure :

outlets of Haldiram‘s give importance to POP displays.

HALDIRAM‟S ABROAD :
HALDIRAM‘S ABROAD Exporting to USA, UK, Australia, Middle East & Far East
Countries,
Germany, Philippines, New Zealand, Nepal, etc. Success over geographical boundaries
hygienically prepared Indian cuisine :Opening of restaurants abroad Ethnicity angle
in the
marketing efforts differentiated Haldiram‘s and enabled it to sustain itself from
threat of
McDonald‘s and Pizza Hut.

SUPPLY CHAIN OF HALDIRAM‟S : SUPPLY CHAIN OF HALDIRAM‘S

Manufacturing unit C&F Agents Distributors Retailers Consumers. 50 C&F agents and
1035
distributors in India Retail outlets such as supermarkets, sweet shops, provision
stores (Goodwill
: Pull strategy : Stockists Compete to hold the brand) Tie up with
www.indiatimes.com with
delivery time of 48 hours to one week and value added services (personal messages)

SWOT Analysis of Haldiram :

Future Expansion :
Future Expansion To increase exports. To increase the existing strong distribution
network. To
come up with IPO to fund its diversification and expansion plan. To launch egg-less
bakery
items.

Suggestions :
Suggestions Diversifying into new innovative products Increase the no. of outlets
Better
promotion Home Delivery Explore the possibility of opening the outlets in foreign
market
Customer service

ITC Foods Launches Bingo

Bingo!

:: Snack foods

The launch of Bingo! in March 2007 marked ITC's foray into

the fast
growing branded snack foods segment. Bingo‘s portfolio includes an array of
products in both
Potato Chips & Finger Snacks segment.

Bingo! is positioned as a youthful and innovative snack, offering the consumers a

choice of
flavours that are fast becoming popular.

The Potato Chips offerings comprise the

ever-popular
Salted, Masala and Tomato flavours, as well as some innovative variants inspired by
the
snacking habits of different parts of the country like Chatkila Nimbu Achaar.

Bingo! – International Cream & Onion is the brand‘s latest

addition to its
existing unique and exciting range. Keeping in sync with the Bingo! philosophy,
this variant
brings with it a unique combination of cheese, cream and spring onions, giving it a
truly
international flavour.
 The Finger Snacks segment, the innovative 'khakra
inspired'
Mad Angles has become an instant hit among consumers and is available in 3 flavours
- Tomato
Mischief, Chilli Dhamaka and Achaari Masti.

Finger Snack „Hatke Jhatke‟, appropriately shaped like

a wave,
takes Bingo!‘s philosophy of ‗combinations‘ forward with two exciting flavours -
Funky
Masala & Tomato Twist.

Marketing Objective
Initial offerings:-
 Potato Chips
 Finger Snacks segment

Potato Chips Variants:- (Habits of different parts of the country)

 Masala Flavours
 Salted Flavours
  Tomato Flavours
 South inspired

Finger Snacks offerings:- (Unique & Innovative)

 Pakoda inspired Live Wires
 Khakra inspired Mad Angles
 Tedhe Medhe

MARKETING OBJECTIVE
 Target is placement of all merchandising units across the market in a months
time
 Create Identity in a Short Span
 Offering a wide range
 Reach every nook & corner
 Distinct Approach ( Innovative & Differentiated products)

BINGO GROWTH STAGE

 Eaten up Market Share of Lays in 9 months

 16% market share @ Snack market
 Now aiming for 25%
 Lays share reduce from 65% to 45%
 High Decibel Advertising
 Novelty Factor
 Regional Flavors
 Distribution Strength
 Market Share 2010

5%
13% Lays
32%
Kurkure
Bingo
23% Haldiram
Others
27%

INTERPRETATION-

 It can be seen that in the chips market in India ,the largest

share belongs to
lays(32%).
 Kurkure snack also has a good market share ,its spicy taste is
being cherished by
the consumers thereby giving it good growth in its market share.

TRENDS-
ITC Bingo:

According to a study by McKinsey & Co, the Indian food market will grow two fold by
2025
with the rapidly growing Indian economy and improving lifestyles of Indians
contributing in a
big way to this growth. Quoting the study by McKinsey & Co, a report by the US
Department of
Agriculture stated "The market size for the food consumption category in India is
expected to
grow from US$ 155 billion in 2005 to US$ 344 billion in 2025 at a compound annual
growth rate
of 4.1 per cent."

"Consumers are willing to pay a premium for both value-added private and branded
products,
creating immense opportunities for manufacturers and retailers,' the report
stated.Potato chips
and potato-based items are the most popular products with more than 85 per cent
share of the
salty snack market, the report said. In the organized potato chips market, some of
the leading
players are Pepsi, Haldiram's, ITC, Britannia, Bikano, Balaji, Marico, Dabur etc.

Bingo was launched in India on Mar 14, 2007 during the world cup time. Main aim of
ITC Bingo
advertisements was to create buzz among customers. Most of the advertisements of
Bingo were
considered vague and stupid but I feel that was the best form of communication any
marketing
company has ever done.

Within a month of launch of initial advertisements, 70% of the viewers could recall
the brand
and that was their main aim. Brand recall along with 16 flavors in three SKUs
helped ITC to
capture 16% of market share in just 18 months of Bingo chips, though it is very
early to say that
whether ITC could sustain such a growth in long term with so many flavors. The
major problem
with so many flavors is that if a person does not like any of the flavor, he will
not even try other
flavors. So much diversification might come in the path of ITC‘s growth in snacks
business.

The segmentation was mainly done on basis of the age of the people. The primary
target for
Bingo is 18-30 year old people, who are willing to try out new flavours more easily
than the
small kids. Bingo is positioned as a youthful and innovative snack.In a survey done
by ITC, it
has been found that 70% of respondents liked Indian flavors like bhel, golgappas
etc. Initial
pricing of ITC bingo is directly frontal attack on Frito lays with pricing of Rs
5,10 and 20. Now
Frito Lays has launched small packs of Rs 3. Let us see whether ITC can leverage
upon its huge
distribution network covering panwaalas to small kiryana shops with a similar small
pack of Rs
3.The Company distributed more than 4 lakh large racks, to display the brand at all
points of
sale. The racks created so much impact that even competitors like market leader
Frito-Lay's
introduced its own version of wafer racks. Within six months of launch Bingo was
available in
more than 2, 50, 000 retailers across the country.

ITC with bingo adopted a Market Challenger strategy and chose a combination of
flank and
frontal attack against the market leader Frito Lay‘s. With the rise of ITC bingo in
no time, Lays
has revamped its branding strategy with new promotions featuring actress like Juhi
Chawla,
Kareena Kapoor etc. About 35 AC BEST buses in Mumbai and metro in Kolkata are now
branded by Kurkure.Frito Lays again launched a new consumer promotion campaign,
Chai Time
Achievers campaign in which consumers could send their recipes using Kurkure. Now
with the
growth of ITC Bingo, Lays has launched Indian flavors like Lay‘s chat street,
India‘s
Mint Mischief, Wafer Style etc.
Ravi Naware, chief executive officer of ITC Foods said, ―We are getting ready to
launch a
media-blitz for ‗Bingo‘ next month. We forayed into this sector in March 2007 and
our market
share today stands at 23 %. Our goal is to capture a 50 % share in this sector.‖

As of now Indian snack industry is about 2500 crore. Frito Lays has 59%, Haldiram
has 13%
market share and ITC bingo has 23% share. Rest of the market is dominated by few
regional
players like Balaji.

It seems to be very difficult goal. There seems to be potential problems like huge
competition by
Frito Lays and Haldiram. Players like Balaji might expand into national terrotiry
or it could be
bought over by players like Lays. The other major threat could be preference of
people toward
healthy snacks.

The snack food industry in India is highly fragmented, with the market dominated by
made-at-
home snacks or savories sold by local vendors. Because of expanding nuclear
families and an
increase in the number of female professionals, India has witnessed a significant
rise in the
demand for ready-to-eat snacks. ―Today, Indian consumers [want] snack foods that
are portable,
hygienic and a ready substitute for hot snacks,‖ comments Sujit Das Munshi,
executive director
of AC Nielsen South Asia.

Snacks like biscuits and potato wafers and Indian savories like laccha (fried
potato sticks) were
already available in the packaged format, but Frito Lay India (a subsidiary of
PepsiCo) decided
to find a niche in the market, by offering a product with a unique shape and taste.
In 1999, the
company (already in the market with its flagship brand Lay‘s) launched Kurkure
("Crunchy" in
Hindi) in the Indian market.

Since its inception, this strangely addictive snack has been a huge success among
Indian
consumers, with recent plans to take this locally developed snack food brand
global. While a soft
launch has already been made, with the brand available at Indian grocery stores in
the US and
UK, a large scale launch is on the agenda. As Indra Nooyi, CEO of PepsiCo, mentions
in an
interview to rediff.com, ―Kurkure will retain its basic Indian flavor [in its
overseas journey], but
will be tweaked a bit [in areas like seasonings] to suit the palate of
international consumers.‖

―Flavor innovations, affordable price points and an excellent customer connect

through a 360
degree communication approach has helped the brand enjoy iconic brand salience in
the snacks
category,‖ observes an industry analyst.

The advertising campaign spoofed popular Indian TV shows like Jassi Jaissi Koi
Nahin (Indian
adaptation of American sitcom "Ugly Betty") to appeal to Indian housewives, the
largest target
audience to watch these programs. In addition to targeting housewives, who play a
significant
role in making purchase decisions,

Apart from traditional "unbranded" snack brands, Indian consumers today have a
variety of
"branded" savories to choose from. While Frito Lay, with a market share of 59 %
percent (US
$550 million), dominates the branded snacks market with its Kurkure and Lays brand,
there are a
host of other players. Haldirams, for example, and newer entrants like Amul‘s Munch
Time and
ITC‘s Bingo, are scrambling for a share of the snack pie. In this overcrowded
market, if Kurkure
continues to tickle consumer taste buds with new innovations, there‘s no reason for
consumers to
stop munching Multinational snack maker FritoLay has Indianised its potato chips
brand Lay‘s
in the wake of competition by new entrants like ITC‘s Bingo. . Although, FritoLay
India leads
the market with a share of59 per cent, it has lost over 10 per cent share in the Rs
2,000 crore
branded snacks market this year. Haldiram‘s and ITC have a market share of 13 and
23 per cent,
respectively.

MARKET LEADERS:
Frito-Lay's is the market leader with a 59 % market share, followed by Bingo with
23%. The
balance market is divided among small local players.

TARGET AUDIENCE:
Generally Potato Chips are targeted towards all age groups differentiated in taste.
For e.g.
Premium Chips (Normal salty chips) are targeted towards Kids & Old age group due to
their
softness, even further it is more specifically targeted based on taste, like
Premium Salted is
targeted towards kids and Both Premium salted / Spicy are targeted toward all age
groups.

PACKAGING:
Leading players try to woo consumers with attractive packaging and designs.
Generally all
branded companies uses the technology of packing the product with nitrogen filled
aluminum
vacuumed pouches, which help to keep the product fresh for a longer shelf life, but
also increases
the cost. Smaller manufacturers like Garden Foods, Raghuvanshi Exports, Janta etc
use Polly
Propane plastic pouches for packaging the products. The pouches are pre-printed
with Company
Name, Brand Name, Product Name, Ingredients, Mfg. Date & Best Before Date. MRP is
then
stamped by a machine before packing the products.Generally these packs are provided
to the
retailers in a series (Lar Form) with a hanging stand. When the products are to be
distributed
outside the country or in a bulk then the pouches are packed in Boxes with Company
Name, Item
Name & Brand Name printed on it.

COSTING & PRICING:

Raw material and packaging are the two major cost components. The organized players
follow
rigorous quality control of raw material and maintain high hygiene standards at
their
manufacturing facilities. This results in a much higher cost of production, thereby
making them
price uncompetetive in comparison to there small scale unorganized counterparts.
Packaging is a major cost, accounting for half the price of the product. Normal
Polly propane
plastic bags costs on an average Rs.2 per pack whereas the aluminum packs costs
around Rs.2 to
Rs.4.5 approximately based on size. The Boxes cost around RS.5 (Minimum) to Rs.32
(Maximum) based on size and quality.Generally manufacturing companies have a profit
margin
of around 20% to 25%. Local Retailers are given 30% to 35% margin whereas in case
where the
products are distributed through distributors the margin of 30% to 35% is
distributed amongst the
Distributors, Super Stokers & Retailers. For e.g. A 55gm pack of Frito's-
Kurkure is pricing
around Rs.10 of which Rs.3 is distributed amongst Distributors & local Retailers.
Out of the
remaining Rs.7 Companies profit is around Rs.1.75 to Rs.2. Packaging costs around
Rs.2 and
distribution and manufacturing costs around Rs.3 to Rs.3.25.

DISTRIBUTION:
Distribution is also one of the key parameters for expanding market share. Frito-
Lays has the
advantage of access to Pepsi's a formidable distribution network whereas products
like Uncle
Chipps is retailed through around 600000 outlets across the country.Generally
Companies are
having their sales vehicles that are loaded on daily basis and are distributed to
local retailers.
Some companies appoint Distributors. Distributors have to give a proposal with a
market
research like storage facilities, infrastructure, retail outlets in area, market
leader, types of
products available in the market etc. In some companies the products are delivered
to the retailer
twice a week (e.g. Frito India), while in some companies on daily basis (e.g.
Garden). The
products are generally sent in Boxes on an average each box contains 80 packs of 30
gm or 30
packs of 150 gm.

Distributors are solely responsible for the sales in the particular area he is
operating in. Every
Distributor should have a specified number (varying from company-to-company) of
minimum
shops in his area. Distributors generally have small vans (rickshaws) and employ
salesmen on
commission basis who loads the products from the distributors storage and
distributes it amongst
the retailers.

Companies nowadays have even started distribution through their websites.

CONSUMER'S PROFILE:
Snack foods are impulse purchase products, and there is an element of indulgence
associated
with them. It does not figure very high on the shopping list. A consumer buys it
only if it catches
his eye at the outlet or is accompanied by a child who finds potato chips a fun
snack. So leading
players have stressed on attractive packaging and promotions targeted at children
to increase
consumption. As these products are general fun eat, brand loyalties are not strong
and consumers
look for novelty and new flavors. There is no notable difference in consumption
pattern across
various age groups. Snacks like Wafers & Chevadas are generally preferred for the
daily
consumption whereas fun- foods like Cheeseballs and Twistys are sold more in
schools, Colleges,
Railway Platforms and Movie Theatres. Kids generally prefer Fun-Foods whereas all
age groups
generally prefer Wafers and other snacks. Taste varies widely across the regions.
For instance
in South, banana chips are extremely popular which do not find many acceptances in
other parts
of the country. In east, Paaprichaat is very successful whereas in Mumbai, tomato
punch has
been a runaway success.

FACTS & FIGURES:

 The Growth rate of market for Potato Chips is expected to grow by
9.3% by the
end 2010.
 Demand of Potato Chips/ Namkeens is expected to reach 790 thousand
Metric
Tonnes whereas For Fun-Foods is expected to reach Rs. 50 bn by the
end of 2010
.
 SM Foods has grown from a sales turnover of Rs 5.96 crore in 1993-94
to Rs 29
crore during 1999-2000. This marks a growth of over 350 per cent over
a period
of five years, a growth rate of 77 per cent each year.
 SM Foods has earmarked more money for marketing this year and is
spending
close to Rs.5 crore on a media blitz.
 Uncle Chipps a Delhi based food products company has an annual
turnover of
Rs600mn.
 Britannia Industries Ltd has introduced a new range of traditional
Namkeens
called Britannia Snax in Mumbai. Targeted at the youth segment, the
new range
includes seven varieties of traditional Namkeens like `Bikaner ki
Bhujia' and
`Rajas-thani Alu Bhujia'. The new range is priced between Rs 5 and Rs
20.
CONCLUSION & RECOMMANDATION:
Snack food industry is quiet a potential market with consumers not being brand
loyal there is
always a scope for new entrants with new innovative products. Consumers generally
like to try
some new products emerging in the markets.

Due to lack of brand loyalty product reach and availability is most important for
increasing the
market share, so Distribution channel plays a major role. Companies need to
encourage their
distributors with some incentives or gifts. Companies should provide proper
training on
marketing and sales to their Distributors as well as Sales Force.Overall Snack food
market is
estimated at 350,000 ton, of which the organized market for chips is estimated to
be 6500 tons
valued at Rs2bn. The market for branded chips has been growing at a fast pace of
around 20 per
cent. Today the companies are entering more into Namkeens category as there are
very few
players and the Namkeens are of regional tastes.Indian snack food industry
comprises of many
Indian as well as MNCs. The Indian snack market reached a value of $307.7 million
in 2001.
The Indian snacks food market is of the order of 400,000 tones. This wide range of
products are
categorized under Potato / Banana Chips, Namkeens & Fun-Foods. The organized market
for
chips is estimated to be 6500 tons valued at Rs.2 bn. The market for branded chips
has been
growing at a fast pace of around 20-25 % annually Since the majority of MNC's
entered their
venture in Ready- To-Eat Snacks & Namkeens.. The research was conducted to study
the actual
buying behavior of the consumers and their preference for such a category of food.
Research
methodology being exploratory research

The Research was a good experience & the final conclusion is that the consumers
generally
associate Snacks & Namkeens with Time Pass. Majority of them prefers wafers to be
their first
choice. Namkeens on other hand are usually preferred as hunger quencher and are
eaten
whenever the consumers are hungry.

Overall the industry is grooming and has vast opportunity to be cashed for the
manufacturers.
BIBLIOGRAPHY-

Reference websites-
 www.google.com

 www.scribd.com

 www.businessdictionary.com

 www.parleproducts.com

 www.britannia.co.in

 www.itcportal.com

 www.haldiram.com

 www.moneycontrol.com

Reference books-
 Marketing management- PHILIP KOTLER
 Research methodology- C.R KOTHARI
 MAGAZINES