y Biscuit industry contribute Rs 8000 crores to the FMCG y y y y y

industry. Biscuit contributes to over 33% of total production of bakery. Per capita biscuit consumption in India is 2.1 kg as compare to 10 kg per capita consumption in USA, UK & Europe. It is classified under two sectorsOrganised & unorganised Organised sector contributes 70% while unorganised sector contributes 30% of total market share of biscuit.

y organised segment produces 1.30 million tones of

biscuits. y In organised sector industry is dominated by britannia and parle which accounts 70% of industry volume.
organised sector unorganised sector

y Biscuit can be categorised in the following segmentsy Glucose (44%) y Marie (13%) y Cream (10%) y Crackers (13%) y Milk (12%) y Others (8%)
crackers 13% milk 12% glucose 44%

Range of products
others 8%

cream 10% marie 13%

y Bread-

The industry is witnessing a very competitive environment, and the customer's taste and preference is deciding the sales pattern of various bread brands in the market. y ChocolateChocolate consumption is gaining popularity in the country on increasing prosperity coupled with a shift in food habits y WafersMany chocolate bars that people eat have wafers in then such as : Kit Kat and Coffee Crisp.

y Bakery products-

The buns, rusks, cake and pastry market estimated at 0.4 million tones, is the fast growing market with volume growth of 16%.

Frequency To Eat Biscuits

once in 15 days 8% once in 10 days 6% once a month 6% never 0% everyday 37%

4 times a week 14%

twice a week 29%

TASTE PREFERENCE

CREAM 15%

SWEET 15%

ALL 51%

SALTY 19%

MARKET SHARE

CREAM 15% ALL 51%

SWEET 15%

SALTY 19%

18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Series1

y The biscuit industry is been experiencing steady

growth of 14-15% annually. In 2008, the growth exceeded 16% mark on account of exemption from Central Excise Duty on biscuits. Indian Biscuit Manufacturers Association (IBMA), instrumental in obtaining the excise duty exemption, estimates annual growth of around 20% in the year 2008-09. Growth in biscuit marketing has been achieved also due to improvement in rural market penetration.

y According to the production figures of members

available up to the calendar year 2009 to the FBMI, the total production is increasing from year to year y (In Lakh Metric Tonnes) 2003-04 - 11.00 2004-05 - 12.54 2005-06 - 14.29 2006-07 - 16.14 2007-08 - 17.14 2008-09- 18.01

y Market share-brand wise(volume)

Company Parle Britannia Priya gold ITC Others
parle 35%

Market share (%) 35 31 15 9 10

britannia 31%

priya gold 15% Others 10% ITC 9%

y Market share (region wise)

REGION % SHARE

NORTH ZONE WEST ZONE EAST ZONE SOUTH ZONE

25 23 28 24

y Strengths  Brand building capabilities:  Brand image of the company existing in the industry, every company has

a strong brand image to consumers.

 Diversified product range of the industry covering al segments.  The depth of distribution  Low and mid price range of the products

y Weaknesses
 Dependence on retailers and grocery stores for displaying diversified

products on shelf.
 Lack of technology up gradation.

y Opportunities
y Indian Biscuit Manufacturers Association (IBMA) estimates annual

growth of around 20% in next couple of years. y The $220 Billion food industry is expected to grow to $300 Billion by 2015. y Per capita consumption of Biscuits in the country is only 1.8 kg as compared to 2.5 kg to 5.5 kg in South East Asian countries and European countries, and 7.5 kg in USA. y Opportunity to further grown in Urban & Rural market; Current penetration levels are, Urban Market: 75% to 85% Rural Market: 50% to 65%

y Threats
y Fluctuations in the prices of raw materials, transportation costs &

distribution
y cost due to high wedges and oil prices, y Emerging local bakery products.

y After liberalization several policy measure have been taken with

regard to regulation and control ,export and import,fiscal policy exchange and interest rate control taxation , export promotion and incentives to food processing and biscuit industries. As per extent policy foreign direct investment up to 100% is permitted under the automatic route in the food infrastructure like food park , cold chain and warehousing . As far as food retail is concerned the FDI policy does not permit FDI into retail sector except single brand product retailing . This policy is uniform for all retailing activity. Food processing industry is one of the growing area identified for exports. Free trade zones (FTZ)and export processing zones (EPZ)have been set up with all infrastructure. Sales tax on biscuit :- FBMI has urged state to fix the rate of VAT on biscuit at the minimum level of 4% meant for items of mass consumption because it is consumed by the different section of society including the poor sections.

y FBMI, Established in 1950. y The FBMI represents the organized biscuit industry

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

y 1892-This prestigious company was established with an initial y y y y y

investment of Rs. 295 only in kolkata. 1975- britannia biscuit company takes over biscuit distribution from parry s. 1983- sales cross Rs 100 crores. 1992- BIL celebrates its platinum jubilee. 1994- volume cross 1,00,000 tons of biscuits. 1997- rebirth new corporate identity Eat Healthy, Think Better leads to new mission: Make every third indian a britannia consumer. 1999- britannia khao world cup jao- a major success ! Profit up by 37%.

y 2001-BIL ranked one of the india s biggest brand.

Number 1 food brand of the country. y 2002-BIL launches joint venture with Fonterra, the world s second largest dairy company. Economic times ranks BIL india s 2nd most trusted brand. y 2011- BIL received the most respected company award from Business world. Bourbon received the most popular confectionary product preferred by youth (biscuit) award.

Strength
Widely accepted in all generations. Easily available in various forms. Provide good instant remedy for hunger in the form of readymade food. Well penetrated distribution network. BIL has strong brand like Tiger, Good day & Marie gold.

Weakness
Decreases nutritional value. Increases the cost of food product. Industry & technology requires high investment. Regular usage of processed food cause alteration in health.

Opportunities
Increases economy of india. Generate employment opportunity. Provide competition to foreign companies. Improve living standards. It has opportunity to grab 30% market share which is grabbed by unorganised sector.

Threats
Regional and local players are more.  Threat of inflation in prices of agricultural commodity. Increasing market of other bakery products. Other competitors like ITC, Parle and Surya foods are playing well in market.

y Current financial position (Feb 10, 2012) y BIL, india s leading company, reported sales of Rs. 12,474

MM, for the quarter, a growth of 15.4% & net profit of Rs 541MM, 44.8% growth . y In Q3 profit increased to 45%.
y y y y y y

Equity shares- 239 mn Reserve and surplus- 4274 mn Sales- 42460 mn Profit after tax- 1453 mn Dividends- 597 mn Current ratio-1.1

Descriptions
Established Nature of business No of manufacturing units Market share(value) Ads major method New area of promotion

Britannia
1892 Public ltd 5 own, 40 CMU

Parle
1929 Family run business 8 own, 60 CMU

31% Cricket events & players Environment

35% Celebrities endorsement Health &wellness

Category
Glucose Marie Salty snacks Choco chips Milk Bourbon Nice Multi grain Cream Cookie

Britannia
Tiger Marie gold 50-50 Good day Milk bikis Bourbon Nice Nutri choice Cream treat Good day

Parle
Parle-G Parle Marie Krack Jack Hide n seek Milk Shakti Hide n seek ----------------Kreams 20-20

Leader
Parle-G Marie Gold Krack Jack Good day Milk bikis Bourbon Britannia Nice Nutri choice Cream treats Good day

 Indias lower and middle class segment will continue

to hold the key to success of the biscuit industry in India.  Distribution (in rural markets)and advertising (in urban markets innovation) and launching of new brands are being adopted by the companies to grab the market.  The companies have added new variants into their existing brands including stylish packaging .  The focus on urban markets have also contributed significantly to the growth of the biscuit industry .

y In India BISCUIT industry even the small

companies are able to make profit. y Standards grocers are the leading distribution channel ,with one third of the Indian biscuit market, by value. Traditional grocers are the only other channel to take a double digit share.