major indian biscuit brand

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INDUSTRY ANALYSIS : 

INDUSTRY ANALYSIS

ON : 

ON

BISCUIT INDUSTRY : 

BISCUIT INDUSTRY




Under the guidance of: : 

Under the guidance of:

Mrs. SUKANYA (Assis. prof.) : 

Mrs. SUKANYA (Assis. prof.)

Major Indian Biscuit Brands : 

Major Indian Biscuit Brands


CONTENTS : 

CONTENTS

Slide 36: 

CHAPTER-1 INTRODUCTION

CHAPTER-2 PRODUCT LINES AND CUSTOMER BEHAVIOR : 

CHAPTER-2 PRODUCT LINES AND CUSTOMER BEHAVIOR

CHAPTER-3 GROWTH OF THE INDUSTRY : 

CHAPTER-3 GROWTH OF THE INDUSTRY

CHAPTER-4 TECHNOLOGY OF PRODUCTION AN DISTRIBUTION : 

CHAPTER-4 TECHNOLOGY OF PRODUCTION AN DISTRIBUTION

CHAPTER-5 MARKETING : 

CHAPTER-5 MARKETING

CHAPTER-6 INNOVATION : 

CHAPTER-6 INNOVATION

CHAPTER-7 STRATEGIES AND COMPETETION IN THE INDUSTRY : 

CHAPTER-7 STRATEGIES AND COMPETETION IN THE INDUSTRY

CHAPTER-8 BUSINESS ENVIRONMENT : 

CHAPTER-8 BUSINESS ENVIRONMENT

CHAPTER-9 CRITICAL SUCCESS FACTORS : 

CHAPTER-9 CRITICAL SUCCESS FACTORS

APPENDICIES : 

APPENDICIES

CHAPTER-1 : 

CHAPTER-1

INTRODUCTION : 

INTRODUCTION

OVER VIEW OF THE INDIAN BUSCUIT INDUSTRY : 

OVER VIEW OF THE INDIAN BUSCUIT INDUSTRY

Biscuit industry contribute Rs 8,000 crore to the FMCG industry and provide a vast opportunity for growth, as the per capita consumption of biscuits is less than 2.1 kg in our country. India It is classified under two sectors: organized and unorganized. Branded /Organized to Unbranded/Un organized market share of biscuit has been 70% for Organized sector and 30% for Unorganized sector . Apart from Big 3( Britannia , Parle , ITC ) there are around 150 medium to small biscuit factory in India . : 

Biscuit industry contribute Rs 8,000 crore to the FMCG industry and provide a vast opportunity for growth, as the per capita consumption of biscuits is less than 2.1 kg in our country. India It is classified under two sectors: organized and unorganized. Branded /Organized to Unbranded/Un organized market share of biscuit has been 70% for Organized sector and 30% for Unorganized sector . Apart from Big 3( Britannia , Parle , ITC ) there are around 150 medium to small biscuit factory in India .

The Industry is now facing problem from increase of raw material price. With Government VAT up to 12.5% has added to their woes .Biscuit consumption per capita in India has grown to 2.1kg per capita in comparison to 10kg per capita consumption in USA ,UK and Europe . : 

The Industry is now facing problem from increase of raw material price. With Government VAT up to 12.5% has added to their woes .Biscuit consumption per capita in India has grown to 2.1kg per capita in comparison to 10kg per capita consumption in USA ,UK and Europe .

India Biscuits Industry came into limelight and started gaining a sound status in the bakery industry in the later part of 20th century when the urbanized society called for readymade food products at a tenable cost. Biscuits were assumed as sick-man's diet in earlier days. Now, it has become one of the most loved fast food products for every age group. Biscuits are easy to carry, tasty to eat, cholesterol free and reasonable at cost. States that have the larger intake of biscuits are Maharashtra, West Bengal, Andhra Pradesh, Karnataka, and Uttar Pradesh. Maharashtra and West Bengal, the most industrially developed states, hold the maximum amount of consumption of biscuits. : 

India Biscuits Industry came into limelight and started gaining a sound status in the bakery industry in the later part of 20th century when the urbanized society called for readymade food products at a tenable cost. Biscuits were assumed as sick-man's diet in earlier days. Now, it has become one of the most loved fast food products for every age group. Biscuits are easy to carry, tasty to eat, cholesterol free and reasonable at cost. States that have the larger intake of biscuits are Maharashtra, West Bengal, Andhra Pradesh, Karnataka, and Uttar Pradesh. Maharashtra and West Bengal, the most industrially developed states, hold the maximum amount of consumption of biscuits.

Even, the rural sector consumes around 55 percent of the biscuits in the bakery products. The total production of bakery products have risen from 5.19 lakh tonnes in 1975 to 18.95 lakh tones in 1990. Biscuits contributes to over 33 percent of the total production of bakery and above 79 percent of the biscuits are manufactured by the small scale sector of bakery industry comprising both factory and non-factory units. : 

Even, the rural sector consumes around 55 percent of the biscuits in the bakery products. The total production of bakery products have risen from 5.19 lakh tonnes in 1975 to 18.95 lakh tones in 1990. Biscuits contributes to over 33 percent of the total production of bakery and above 79 percent of the biscuits are manufactured by the small scale sector of bakery industry comprising both factory and non-factory units.

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 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. : 

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.

Two Sectors of Biscuit Industry : 

Two Sectors of Biscuit Industry

In terms of volume biscuit production by the organized segment is estimated at 1.30 million tones. In the organized sector, the industry is dominated by Britannia and Parle, which account for 70 per cent of the industry's volumes. The two major organized players are Britannia and Parle. Britannia’s market share stands at Rs 27 billion. Parle derives a large portion of its revenues from low-priced biscuits. Parle-G and Britannia derive a fairly large share of their revenues from the medium- and premium varieties. In fact, Britannia's market share in the medium and premium varieties is significantly higher. : 

In terms of volume biscuit production by the organized segment is estimated at 1.30 million tones. In the organized sector, the industry is dominated by Britannia and Parle, which account for 70 per cent of the industry's volumes. The two major organized players are Britannia and Parle. Britannia’s market share stands at Rs 27 billion. Parle derives a large portion of its revenues from low-priced biscuits. Parle-G and Britannia derive a fairly large share of their revenues from the medium- and premium varieties. In fact, Britannia's market share in the medium and premium varieties is significantly higher.

Other organized players include domestic players like Brakeman’s, Champion, Kwality, Priya and MNC’s like SmithKline Consumer, Kelloggs, Sara, Heinz, Excelsia (Nestle) and United Biscuits. : 

Other organized players include domestic players like Brakeman’s, Champion, Kwality, Priya and MNC’s like SmithKline Consumer, Kelloggs, Sara, Heinz, Excelsia (Nestle) and United Biscuits.

The unorganized sector consists of small bakery units, cottage and household type manufacturing their goods without much packaging and distributing their goods in the surrounding areas. Lower overheads due to limited local area, family management, focused product lines and less expenditure on marketing help the unorganized sector to : 

The unorganized sector consists of small bakery units, cottage and household type manufacturing their goods without much packaging and distributing their goods in the surrounding areas. Lower overheads due to limited local area, family management, focused product lines and less expenditure on marketing help the unorganized sector to

grow. : 

grow.

The organized biscuit manufacturing industry‘s annual production were around 1.1 million tons in 2003-04, 1.25 million tons in 2004-05, 1.4 million tons in 2005-06, 1.6 million tons in 2006-07 and 1.7 tons in 2007-08. : 

The organized biscuit manufacturing industry‘s annual production were around 1.1 million tons in 2003-04, 1.25 million tons in 2004-05, 1.4 million tons in 2005-06, 1.6 million tons in 2006-07 and 1.7 tons in 2007-08.



HISTORY OF BUSCUIT INDUSTRY : 

HISTORY OF BUSCUIT INDUSTRY

Biscuits are a very significant part of the food industry in most countries of the world. A biscuit is a small baked product; the exact meaning varies markedly in different parts of the world. The origin of the word "biscuit" is from Latin via Middle French and means "cooked twice" (similar to the German Zwieback). Some of the original biscuits were British naval hard tack. That was passed down to American culture, and hard tack (biscuits) was made through the 19th century. : 

Biscuits are a very significant part of the food industry in most countries of the world. A biscuit is a small baked product; the exact meaning varies markedly in different parts of the world. The origin of the word "biscuit" is from Latin via Middle French and means "cooked twice" (similar to the German Zwieback). Some of the original biscuits were British naval hard tack. That was passed down to American culture, and hard tack (biscuits) was made through the 19th century.

Biscuit can flourish in any environment where there is a base population, in the immediate vicinity of the plant; a country with large population is well suited for a biscuit plant. Biscuit is most suited for local production. This factor alone has made India a big biscuit center. Biscuit Industry has flourished in India enormously over the years and is still growing phenomenally. : 

Biscuit can flourish in any environment where there is a base population, in the immediate vicinity of the plant; a country with large population is well suited for a biscuit plant. Biscuit is most suited for local production. This factor alone has made India a big biscuit center. Biscuit Industry has flourished in India enormously over the years and is still growing phenomenally.

This growth has funneled a growth of all facets of biscuit making in India. While the modern India is considered a centre for software development, many do not realize that one industry that has developed similar capabilities is Biscuit. : 

This growth has funneled a growth of all facets of biscuit making in India. While the modern India is considered a centre for software development, many do not realize that one industry that has developed similar capabilities is Biscuit. Today India can boast of being

FBMI, Established in 1950, from gathering of CEOs of small, medium and large Biscuit manufacturing organizations in the country’s capital city, the Federation of Biscuit Manufacturers of India, popularly known as FBMI has come to stay as the premier forum of the organized segment the biscuit industry in India, by virtue of its effective servicing and result oriented activities, with the prime objective of protecting and promoting the interests and development of the Biscuit industry. : 

FBMI, Established in 1950, from gathering of CEOs of small, medium and large Biscuit manufacturing organizations in the country’s capital city, the Federation of Biscuit Manufacturers of India, popularly known as FBMI has come to stay as the premier forum of the organized segment the biscuit industry in India, by virtue of its effective servicing and result oriented activities, with the prime objective of protecting and promoting the interests and development of the Biscuit industry.

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

The FBMI represents the organized biscuit industry consisting of small scale, medium and large biscuit manufacturers located in all zones and all States of the country. As the apex body of the biscuit industry, the Federation strives to serve its members in particular and the biscuit industry in general. Regional bakery brands few regional players have made a mark in their respective zone,

Britannia dominated the premium segment of biscuits where as Parle dominated the mass ,low premium biscuits ,things were pretty predictable but for the entry of new players have changed that status. Now that ITC and Priya gold are trying to break into their market and have established themselves as important players in biscuit market . These two major biscuit producers has are now forced to innovate products by the consumers to create brands which could be differentiated. : 

Britannia dominated the premium segment of biscuits where as Parle dominated the mass ,low premium biscuits ,things were pretty predictable but for the entry of new players have changed that status. Now that ITC and Priya gold are trying to break into their market and have established themselves as important players in biscuit market . These two major biscuit producers has are now forced to innovate products by the consumers to create brands which could be differentiated.

Both are trusted brand are ranked in top brands for biscuit, both have a long history of brands . The Major difference though is that where Britannia is revenues from bakery products is around 90 % ,share of biscuit sales is around –80% for Parle. : 

Both are trusted brand are ranked in top brands for biscuit, both have a long history of brands . The Major difference though is that where Britannia is revenues from bakery products is around 90 % ,share of biscuit sales is around –80% for Parle.

PARLE VS BRITANNIA : 

PARLE VS BRITANNIA

IMPORTANT BRANDS PITCHED AGAINST EACH OTHER : 

IMPORTANT BRANDS PITCHED AGAINST EACH OTHER

So the battle for market share continues and advantage is for consumers who will get better product from both these biscuit majors . : 

So the battle for market share continues and advantage is for consumers who will get better product from both these biscuit majors . Market share data for Indian biscuit industry:

Here are market share data for biscuit industry from report s available at IBMA ( Indian Biscuit Manufacturers Association) . : 

Here are market share data for biscuit industry from report s available at IBMA ( Indian Biscuit Manufacturers Association) .

The biscuits industry now has two clear models. Parle products play the low price game at all varieties of biscuits from glucose to cream. : 

The biscuits industry now has two clear models. Parle products play the low price game at all varieties of biscuits from glucose to cream.

Essentially, Parle plays a high volume, low margin game. But Britannia and Sunfeast look at a two-pronged strategy. High margins in cream variants and volumes from the Marie and Glucose segments. : 

Essentially, Parle plays a high volume, low margin game. But Britannia and Sunfeast look at a two-pronged strategy. High margins in cream variants and volumes from the Marie and Glucose segments.

For instance, cream biscuits from both Britannia and Sunfeast cost Rs 10 for 100 grams. Parle, however, only charges Rs 5 for its cream variants. Except for Hide & Seek, all of Parle’s products lie in the price range between Rs 4 and Rs 6 for 100 gram packs. : 

For instance, cream biscuits from both Britannia and Sunfeast cost Rs 10 for 100 grams. Parle, however, only charges Rs 5 for its cream variants. Except for Hide & Seek, all of Parle’s products lie in the price range between Rs 4 and Rs 6 for 100 gram packs.

To be fair, in Glucose and Marie, the companies have little choice. As there is little differentiation, consumers are extremely price sensitive. But these segments are important. Marie and the popular glucose varieties make up for nearly 55 per cent of the Rs 4,000 crore biscuits segment — a significant Rs 2,200 crore. : 

To be fair, in Glucose and Marie, the companies have little choice. As there is little differentiation, consumers are extremely price sensitive. But these segments are important. Marie and the popular glucose varieties make up for nearly 55 per cent of the Rs 4,000 crore biscuits segment — a significant Rs 2,200 crore.

Some of the new innovative products & packs introduced include Treat Fruit Rollz, NutriChoice Digestive, NutriChoice SugarOut, Good Day Jumbo, Tiger – Banana (fortified with iron), Good Day – Classic Cookies, Greetings – gift packs and a variety of cheese variants. Several power brands were renovated to enhance their taste & health appeal. Britannia is the only biscuit company to have removed trans-fat from all its recipes. : 

Some of the new innovative products & packs introduced include Treat Fruit Rollz, NutriChoice Digestive, NutriChoice SugarOut, Good Day Jumbo, Tiger – Banana (fortified with iron), Good Day – Classic Cookies, Greetings – gift packs and a variety of cheese variants. Several power brands were renovated to enhance their taste & health appeal. Britannia is the only biscuit company to have removed trans-fat from all its recipes.

LABOUR: The Biscuit industry is a labor intensive and employees 3.25 lakh people directly and 35 lakh people indirectly. : 

LABOUR: The Biscuit industry is a labor intensive and employees 3.25 lakh people directly and 35 lakh people indirectly.

However, escalation in the cost of production coupled with price hike in raw materials has led to the closure of 8-10 small scale biscuit units and rendering 7,000 jobless : 

However, escalation in the cost of production coupled with price hike in raw materials has led to the closure of 8-10 small scale biscuit units and rendering 7,000 jobless

Internal: These are cost savings that accrue to a firm regardless of the industry, market or environment in which it operates. : 

Internal: These are cost savings that accrue to a firm regardless of the industry, market or environment in which it operates.

External: These are economies that benefit a firm because of the way in which its industry is organized. : 

External: These are economies that benefit a firm because of the way in which its industry is organized.

Internal economies of scale arise in a number of areas. For example, it is easier for large firms to carry the overheads of sophisticated research and development (R&D) In the recent scenario of the industry there is a crucial requirement for the companies to come out with innovative products. : 

Internal economies of scale arise in a number of areas. For example, it is easier for large firms to carry the overheads of sophisticated research and development (R&D) In the recent scenario of the industry there is a crucial requirement for the companies to come out with innovative products.

External economies of scale include manufacturing of bulk products, procurement of raw materials in bulk etc. : 

External economies of scale include manufacturing of bulk products, procurement of raw materials in bulk etc.

Economies of scope: There is wider scope for the biscuit industry in India because of the following factors, : 

Economies of scope: There is wider scope for the biscuit industry in India because of the following factors,

Population of the country : 

Population of the country

Biscuits are Consumed by all the segments of the market, like , children, youth, and adults : 

Biscuits are Consumed by all the segments of the market, like , children, youth, and adults

Agriculture based industry: with the major inputs - wheat flour/atta sugar, milk vanaspati/vegetable oil etc all being agriculture produces. : 

Agriculture based industry: with the major inputs - wheat flour/atta sugar, milk vanaspati/vegetable oil etc all being agriculture produces.

Mass consumer segment. : 

Mass consumer segment.

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