Biscuit,snack confec

07.03.2011

Biscuit

Industry Overview
The total production of biscuits in India is estimated to be around 30 lakh MT. The organized sector accounts for 65% whereas the unorganized sector stands at 35% of the total industry volume. The organized sector is valued at above Rs 8000 crores. The biscuit industry is estimated to grow over 15-17% in the next few years. The per capita consumption of biscuits in India is 2.0 kg. India is ranked 3rd after US and China amongst the global biscuits producers. The export of biscuits is approximately 17% of the annual production, the export of sweet biscuits for year 2007-08 was Rs 145.93 Cr and for year 2008-09(April-Dec) was Rs 280 Cr. The major exporting regions were Haiti, Angola, USA, Ghana & UAE.

Industry Overview
The imports are not significant amount as compared to the total consumption. The penetration of biscuits in urban and rural market is 85% and 55% respectively. The Biscuit industry employs almost 3.5 lakh people directly and 30 lakh people indirectly.

Industry Overview
The organized biscuit manufacturing industries annual production

Year

2003-2004

2004-2005 12.54

2005-2006 14.29

2006-2007 16.14

2007-2008 17.14

2208-2009 19.5

Annual 11.00 Production (lakh mt)

Industry Overview
Main categories of biscuits Glucose, Marie, Sweet, Salty, Cream Milk & Health. 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.

Industry Overview
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 are Horlicks, Biskfarm in East, Rose in Andhra Pradesh & South Sobisco is strong in East and North East. They have recently launched in Andhra Pradesh and Madhya Pradesh as well Nezone in North East, Bakewell

Industry Overview
Market share breakdown

The Indian biscuit industry is dominated by brands like Parle, Britannia and Sunfeast

Industry Overview
Consumption patter across various region

Consumption of biscuits is even across the regions

Competition

Key Players
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), worlds third largest biscuit company, is set to enter India market Shakti Bhog plans to enter biscuits segment

Key Players
Britannia Industries Ltd. : Net sales for FY 2008-09 are Rs 3,112.2 Cr. For FY 07-08 biscuits recorded sales of Rs. 2,329.9 Cr. Key Products: Tiger, Good Day, Bourbon, 50-50, Treat, Milk Bikis, Marie Gold, NutriChoice, Timepass & Little Hearts Surya Food & Agro Ltd: Manufacturing & selling of biscuits under brand Priyagold. Company has three plants located in Greater Noida, Lucknow & Surat. They also outsource some of our requirements to another plant located in Hyderabad. Capacities have reached 1,50,000 MT p.a. Key Products: Classic Cream , Butter Bite ,Kids Cream, Bourbon, Big Boss, Marie Lite, Magic Gold, CNC, Cheese Cracker, Snacks Zig Zag, Don, Coconut Crunch, Cheez Bit Classic Salt & Chatpata

Key Players
ITC Ltd: In July 2003, ITC forayed into the Biscuits market with the Sunfeast range of Glucose, Marie and Cream Biscuits. Sunfeast with a current market share of 10% is now clearly established as a credible third brand. 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 Special Anmol Biscuits Ltd : Anmol is a popular brand of eastern & northern region, having manufacturing facilities in W.B & U.P. Key Products: Lemon Mazaa, Funfill Choco Vanilla, Yummy - Milk Cream, Tip Top Kajoo Kurkure Masala, Coconutty, Thin Arrowroot, Marie,2 in 1, Butter Bake, Cream Cracker, Dil Khush, Dream Lite, E-Time, Funfill Orange, Funfill Rich Chocolate, Golmol, Jadoo, Marie Time & Snackles

Trends

Trends in the Biscuit Industry

The new buzz - Specialty/ Health segment; Nutrichoice health biscuit range targeted to diabetics Rich Indulgence with exotic flavors; Oreo from Kraft & Dark fantasy from ITC Crossovers - cream filled wafer biscuit; Chocko Decker & Golden Arcs Crackers/ Light snack substitutes/ meal fillers. Ex.: Aliva, Arrowroot & Cream Crackers

Confectionery

Industry overview
Indias confectionery market is set to witness robust growth in the coming years. The factors contributing to the growth are buoyancy in demand, increasing consumerism, dual family incomes and a rising young population Confectionery industry is the largest in the food processing segment. The market is estimated to be about Rs 1,400 crore, registering a growth of 9% per annum Categories Chocolates like eclairs & toffees Sugar confectionery or hard boiled candies Lollipops Mints & lozenges Bubble gum Cereal bars.

Industry overview
The total global confectionery market is at Rs 41 billion with a volume turnover of about 2,23,500 tonnes per annum Category is largely consumed in urban areas with a 73% skew to urban markets and a 27% to rural markets Hard boiled candy accounts for 18%, clairs and Toffees account for 18%, Gums, Mints and lozenges are at par and account for 13%. Digestive Candies and Lollipops account for 2.0% share The chocolate segments is estimated to grow 23%, while the hard boiled sugar candy will decline by 19%.

Industry overview
In June 2004, the erstwhile Parry`s Confectionery, part of the Chennaibased Murugappa group, was bought over by Koreas Lotte India Godrej Foods & Beverages Limited acquired Nutrine Confectionery Company Private Limited in June 2006. Close to the heels of this deal was a joint venture effort in April 2007, when the Hershey Company, North America's leading chocolate and confectionery manufacturer, announced the formation of Godrej Hershey Foods & Beverages Ltd., to manufacture and market confectionery across the country.

Industry overview
Distribution channel
Wrigley Factory (Baddi/ Bangalore) CFAs (32)
The distribution centers feed about 2200 distributors across India

Modern Trade Distributors Wholesalers Sub Distributor Wholesalers Super Distributor

Retailers

Retailers

Consumers

Industry overview
Gums Market Vs Non Gums
GUMS $ 100 Mn
54.8%
8.2% 9.2% 9.9% 7.1% 6.7% 6.1%

NGNC $ 426 Mn

11.5%

24.5% 16.9% 2.0% 1.0%

39.0%

0.4%

1.9% 2.8% 1.1%

Wrigley Candico Cadbury

Perfetti Lotte Others

PERFETTI VAN MELLE PARLE PRODS NUTRINE LOTTE INDIA CORPORATION LTD OTHERS Candico

ITC CADBURY INDIA NESTLE INDIA PROCTER & GAMBLE Wrigley

Industry overview
Gum Market - Premium vs. Mass

While the gum market is dominated by mass products, premium segment (>= Rs 5/- ) contributes to about 24% of the total gum market.

76% 24%

Premium segment

Mass segment

Industry overview
Market Share

XHALE 0% POLO 15%

OTHERS 3% MENTOS 17%

HALLS 23% CHLOR MINT 20%

MINT-O FRESH 22%

XHALE OTHERS MENTOS MINT-O FRESH CHLOR MINT HALLS POLO

Industry overview
Zone wise consumption

NORTH ZONE 17% SOUTH ZONE 49% EAST ZONE 9% NORTH ZONE EAST ZONE WEST ZONE SOUTH ZONE

WEST ZONE 25%

Competition

Key players
Perfetti Perfetti Van Melle entered the Indian market in 1994 by offering its first brand Center Fresh, followed by Big Babool and Alpenliebe in 1995. The other brands like Chlormint, Mentos, Fruittella, Cofitos, Happydent and Marbles followed subsequently. PVMI enjoys a huge brand recall among its consumers which form a total estimated market size of Rs.3000 cr. Giving them the spot of market leaders. The PVMI manufacturing units in India are located in Gurgaon and Chennai with another plant commissioned at Rudrapur Network of around 4,500 distributors spread across 2000 urban towns PVMI brands have launched several innovative ad campaigns like Happydent White, Chlormint, Alpenliebe and Mentos which have won several awards for the company like the Abby for Protex Happydent & Centre Fresh, Cannes (Silver & Bronze) & Ad fest for Happydent White and Effies for Mentos.

Key players
ITC Confectioneries ITC currently has two brands in the confectionery segment - 'mint-o' and 'Candyman mint-o' was acquired by ITC from Candico in March 2002. It is available in mint flavour with added blue specks to enhance consumer experience. mint-o is available in 3 sizes rolls of 20 and 6 and singles, capturing the international essence of youthful cool. ITC launched 'mint-o Fresh' in October 2004. An active mint deposited candy, mint-o Fresh is available in a refreshing mint flavour mint-o Fresh Eucalyptus. 'mint-o Fresh' is especially targeted at the adult consumer creating a basket of mint-based products across price points. The latest offering in the adult mint confectionery segment is mint-o GOL, in the `Chews' sub-segment. A brand for young adults, mint-o GOL appeals to both men and women, offering "refreshing indulgence".

Key players
ITC confectioneries ITC launched the 'Candyman' range of confectioneries in August 2002. Led by the 'Candyman Fruitee Fun' range of assorted fruit flavours ('Wild Banana', 'Pineapple Punch', 'Orange Josh' and 'Mango Delite'), the 'Candyman' portfolio now includes deposited candy products like 'Candyman Butterscotch Licks' and 'Candyman clairs' (Choco flavoured as well as Vanilla Cream centre inside a Butterscotch outer shell). The coffee toffee segment also saw the successful launch of 'Candyman Cofitino' in November 2005. The brand was further strengthened with the launch of 'Candyman Natkhat Mango' and 'Candyman Maha Mango'. In line with the strategy to provide innovative flavours and formats to consumers,

Key players
ITC confectioneries Candyman Mango Licks was launched in June 2007, Candyman Lacto Creme Centre in June 2008 and Candyman Toffichoo Strawberry in early 2009. Candyman Lacto Creme Center is the only Lacto with a yummy cream filled center, and Candyman Toffichoo is a luscious fruit flavored soft and chewy toffee. The 'Candyman' range of confectionery is targeted at fun-filled, naughty kids who seek a delightful candy experience through a range of candy types and flavours

Key players
Lotte Lotte India Corporation Limited is a subsidiary of Lotte Confectionery Co. Ltd., Korea. It had been facing some problems recently, due to raw material price hike and stagnating sales. Its portfolio includes coffee bite, spout, Boo Proo & clairs

Key players
Candico Candico began operations in the year 1997. By the year 2002 it grew to become the second largest Indian confectionery company. Candico is one of only two Indian companies to emerge as a confectionery major after the industry consolidated in the late 90's. With over 2 billion confectionery products sold every year, With 24 depots, 1500 authorized dealers and a 250 people strong sales force, Candicos distribution network in India has a direct or indirect reach in most towns and cities with a population of over 25,000. It is estimated that Candicos brands reach out to over 60 percent of Indias 1000 million people.

Candico portfolio
Gums Loco Poco Jumbo Jumbo Gumbo Fruits Gum Balls Time Bomb Gumbo Gum balls Gumbo chewing gum Big Bubble gum Candies Fruits candy Candi Fruit candy Milk candy Mint candy Lacto Plus Toffees Elaichi roll Koffi Toffi Popular Toffee Eclairs

Key players
Candico CANDICO also plans to open specialty confectionery stores in South Africa All specialty stores will stock a wide variety of chocolates; candies, jellies and sugar free candies, with as many as 200 new confectionery items available at each store The chain shall operation a Pick-N-Mix concept, where consumers can select from a wide assortment of candies, jellies and chocolates to suit their tastes.

Key players
Halls Halls is marketed in 24 different countries around the world & is offered in over 26 flavours Halls produced the largest sweet in the world in 1964. Weighing 76kilos, the sweet was put on exhibition in New York Halls accounts for more than 50% of international cough drop sales In 2002, people consumed 100,000 tons of Halls! Halls has had a colourful advertising history in India & was in fact, one of the earliest brands to advertise on television in India. In the 1980s, Ads featuring Meenakshi Sheshadri and later, Vijeta Pandit on its unique vapour action formula with a classic Halls Jingle were aired which established the brand firmly in the market. In the 90s, Halls advertising adopted a different take with its Traffic Jam Ad where Halls restores order to a situation of chaos & the early 2000s saw Halls advertising on the refreshment platform.

Key players
Halls Over the years Halls has been strongly positioned on the` soothes sore throat benefit in the consumers mind.

Key players
Cadbury Bubaloo Bubaloo was launched in 1984, it has seen fresh marketing activity recently Cadbury India has expanded its confectionary portfolio in 2007 by foraying into the Bubble gum category with the launch of Bubbaloo Bubblegum- a successful bubblegum brand from its international portfolio Bubbaloo is sold in 25 countries and is particularly popular in Latin America. The record for the largest bubblegum bubble ever blown is 58.4cm. The bubble was blown by Susan Montgomery Williams of Fresno, California, USA at the ABC-TV studios in New York City, in 1994 Bubbaloo is an innovative soft bubblegum with a centre filled liquid. It is filled with a high level of a great tasting fruit flavoured liquid that floods your mouth instantly

Key players
Cadbury Bubaloo Bubaloo is currently available in two flavors- Strawberry and Mixed Fruit The communication focuses on the "fun filled liquid centre " of Bubbaloo and is anchored by Bubba- the cat, the international mascot for the brand Bubbaloo.

Other players
Naturo Food & Fruit Products Pvt. Ltd in the outskirts of Bangalore is one of the largest Indian confectionery companies known for its innovative fruit based products Pops Foods Products Private Limited manufactures a range of bubble gums Central Arecanut and Cocoa Marketing and Processing Co- operative Ltd (Campco) based at Mangalore produces chocolate for Cadbury. It also produces all type of moulded chocolates along with semi-finished products like cocoa butter and cocoa powder. Kraft has now inked a pact with Karnataka Milk Federation to manufacture chocolates at its facility. At Defence Food Research Laboratory, Mysore efforts were on to develop a range of candies and fruit bars for the armed forces stationed in high altitudes

Trends

Trends
It is observed by a section of food scientists from the University of Agricultural Sciences department of food innovation and research that the confectionery industry has achieved maturity. The growth is attributed through globalised efforts like mergers and acquisitions or joint development efforts. There is also the factor of rising incomes and affordability in many of the developing markets which indicate novel tastes and aspirations for newer confectionery Another trend is the growing health consciousness which has led to the development of confectionary in low-fat, low-sugar, versions. There is also the inclination to look at products that are free from artificial colours, flavours and additives. This throws open business opportunities for development of ingredients using natural ingredients

Trends
The confectionery sector has felt significant changes since a few years. Food consultants are attributing this to changing consumer consumption habits. Confectionery manufacturers are working to influence to healthconscious consumers with functional innovations, ensuring that they still continue to show the streak of active indulgence. Extensive product and market research is on to see that new products come in. Key growth opportunities for the industry are in categories of gum, chocolate and cereal bars, says Dr Prakash.

Challenges

Challenges
The rising inflation and food prices together with the growing crude prices would impact the confectionery industry in the coming months. While cost of sugar is a concern, there is also the issue of working out costs in packaging driven by petroleum products as confectionery items are packaged in plastic packs. Therefore the industry will now need to work out a pricing due to big jumps in the cost of raw materials such as sugar which cannot be absorbed by the industry, stated observers Health Consciousness among consumers and the shift towards healthy and natural foods is a cause of concern for the industry. Parents avoid candies for children

Snacks

Industry overview
Snack is described as a small quantity of food eaten between meals or in place of meal. The branded snack market is estimated at Rs 6,500 crore and is growing at 20 to 25 per cent per annum According to the ministry of food processing, the snack food industry is worth Rs 100 billion in value and over 4,00,000 tonnes in terms of volume. According to an Apeda survey, almost 1,000 snack items and 300 types of savouries are sold across India. The branded snacks are sold at least 25% higher than the unbranded products. AC Nielsen's retail audit shows that the large sales volumes are due to Marked preference for ethnic foods Regional bias towards indigenous snacks VFM proposition

Industry overview
In the branded snacks market, Frito Lay commands a share of 45%, followed by Haldirams at 27% and ITC at 16%. Rest is divided between a handful of new entrants, wannabes and many regional players.

Key Players
1. FRITO LAYS, Cheetos Cheetos, a global brand, launched in India in 1995 has been positioned as a brand which inspires imagination and a sense of adventure and fun. Variants available are as follows Crunchy Masala Balls Crispy Tango Loops Cheese Balls & Cheese Puffs Healthy Cheetos Whoosh, which is made with whole wholegrain and vegetables and comes exciting whorl shape

Key Players
Lays launched in 1995, 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 Lays continuously experiments with new local and international flavours in the market. It has established itself as a youth brand . Some of its main flavours are American Style Cream and Onion Spanish tomato tango World Classic Salted Magic Masala

Key Players
Lays new/ Intermitent Flavors Chat Street Lays contest- HipHop Honey and Chili, Cheesy Mexicana, Mango Mastana, and Tangy Twist West Indies- Hot and Sweet Chilli South Africas- Peri Peri Chilli Englands- Grilled Cheese Austrailas Herb n lime twist Sri Lankas Sweet onion sauce

Key Players
Kurkure 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] Flavors Masala Munch (Original) Green Chutney Rajasthani Style Chilli Chatka Tamatar Hyderabadi Style Malabar Masala Style Masala Twists(Solid Masti) Desi Beats Naughty Tomatoes

Key players
Lays Special (Limited) Edition Pujo Special:Jhajhalo Hit - Released in West Bengal for Durga Puja, 2007 Ganeshotsav Special:Usal Pao - Released in Maharashtra for Ganesh Utsav,2010

Key Players
Lehar Namkeen Lehar was launched in 1996 , Innovated through small packs and new traditional Flavours. Was built on communication, irresistible taste and modern imagery Lehar was re-launched in 2006 and positioned on the plank of "Taste zyaada kyonki oil taza" with a promise to deliver good taste through the use of fresh oil in manufacturing Quaker Oats - Say Good Morning to your Heart Quaker Oats is a nutritious breakfast that helps reduce cholesterol

Key players
Uncle Chipps
Launched in 1992, Uncle Chipps was a pioneer in branded potato chips in India. The brand was acquired from Amrit Agro Ltd. in 2000 by Frito-Lay India. The extremely popular brand has grown from strength to strength post acquisition with consumers feeling a very strong connection with it. Uncle Chipps is' warm playful, lively, companionable and traditional-at-heart', just like the Uncle everyone in the family related to and no family gathering is complete without
With the launch of Aliva, FritoLay India aims to create a new segment of great tasting baked savoury crackers After Kurkure's enormous success, Aliva marks FritoLay India's creation of yet another category borrowing ingredients & textures from biscuits & flavourful experiences from namkeens. Aliva is a product range developed in India especially for the Indian consumer & is a significant step in the companys journey of portfolio transformation towards providing healthier and tasty snacking options in line with local consumer needs

Aliva

Key players
2. ITC Foods Bingo! The launch of Bingo! in March 2007 marked ITC's foray into the fast growing branded snack foods segment. Bingos 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 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 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

Key players
Bingo! Finger Snack Hatke Jhatke, appropriately shaped like a wave, takes Bingo!s philosophy of combinations forward with two exciting flavours - Funky Masala & Tomato Twist

Key players
3. Haldirams Indian Sweets, Namkeens (Savories), Salted Snacks, Papad, 3-D Snacks, 3-D Pellets, Vermicelli, Pasta & other ready to eat snacks, are sold under the brand names Haldiram's Takatak Boletos Chips Namkeens Bhel Puri Haldirams products are exported to more than 15 countries and are readily available in major super-markets in the U.S

Key players
4. Parle Agro Hippo The company has launched Hippo in five variants Chinese Manchurian, Hot-n-Sweet Tomato, Thai Chilli, Yoghurt Mint Chutney and Italian Pizza and the price points are aggressive: Rs 5 for 15 gm and Rs 10 for 38 gm Hippo has been positioned differently from chips which are fried and made from potatoes. Hippo is made from wheat, is baked and has no MSG (monosodium glutamate), GMO (genetically modified organism), trans-fat and cholesterol. The positioning, according to Chauhan, is a guilt-free snack for hunger moments that can arise anytime and anywhere. Latest Positioning- Mothers flavours from across India Targeted at the youth, the advertising and marketing campaign for the brand will see the mascot, Hippo in action

SWOT

Strengths
Abundant availability of raw material Vast network of manufacturing facilities all over the country Vast domestic market Urbanisation

Weaknesses
Low availability of adequate infrastructural facilities Lack of adequate quality control & testing methods as per international standards Inefficient supply chain due to a large number of intermediaries

Opportunity
Rising income levels and changing consumption patterns Favourable demographic profile and changing lifestyles Integration of development in contemporary technologies such as electronics, material science, bio-technology etc. offer vast scope for rapid improvement and progress Opening of global markets

Threat
Affordability and cultural preferences of fresh food High inventory carrying cost High taxation High packaging cost Competition between national, regional players and local players. Home made snacks and street food.

Trends

Trends
Wide expansion of nuclear families has also brought forth a quantum leap in demand of snack foods which are hygienic, nutritious, portable and substitute for hot snacks. It is a vehement temptation for healthy ready to eat snacks that urge the people to gobble up occidental snacks like Pizza, Burger, Chips, and French Fries which have conquered the palate of people. Production of branded snack food is expected to grow annually at 20%. Potato chips are by far the largest product category within snacks and holding the largest share about 85% of the total market revenue. The branded chips market has been prospering at a fast pace of about 20 to 25 per cent annually

Sources
Market Research data 2010 Indiainfoline.com Scribd.com www.business-standard.com Individual Brand Websites.

Thank You !