Selection of new wares on the market: crunchy choice
Take an old recipe, give a dash of exciting new flavour and wrap it inside a snazzy packet. That which you have are crisp returns within the food industry's most widely used segment: the Rs 1,200-crore annually biscuits business. The creamy profits being generated recently have attracted a number of large concerns.
Creating a beeline for that lucrative upper finish from the biscuits market are Kissan, Cadbury's, Lipton and Indodan Industries. And traditional bigwigs like Britannia and Parle - which take into account over half the marketplace - are wooing consumers with increased exciting recipes, meticulous focus on quality and aggressive marketing strategies.
Result: biscuit sales are increasing in a comfortable clip of 6 percent each year. And also the fancy cream-and-chocolate segment keeps growing even faster at 12 percent. Using the rural market still largely untapped, the development rate may go up greater. States H. S. Jalan, chairman of Indodan which lately diversified from ghee and instant coffee into biscuits: "The marketplace keeps growing fast there are other players and much more competition."
Large information mill focusing on the greater costly biscuits. For producers, income within the upper segment average 5 percent of turnover against 1 percent within the cheaper, more cost-sensitive segment including glucose biscuits. When biscuit production was restricted to the little-scale sector in 1977, big firms found the going rough.
Inside a decade, the 200-odd small units found dominate the low finish from the market. States S.H. Pherwani, a Bombay-based industry consultant: "Since small units have lower costs of production, large firms were forced to focus on quality value biscuits."
Also, big biscuit information mill getting small units to fabricate biscuits, that they then market under their very own brand. States KKay. John, vicepresident, Kissan Products Limited which began marketing biscuits this past year: "Goal to produce new biscuit flavours within the parent company and also have these created within the small units."
Kissan lately introduced a chocolatecum-mint flavoured biscuit and also the exotic Florida Fantasy, an orange-flavoured cream biscuit. Lipton is wooing kids with a Snackle wafer costing just Re 1 per packet. And Indodan, wishing to profit from its effective Gold Coffee shop coffee, intends to introduce the nation's 'first' coffee-flavoured biscuit.
Even Cadbury's has realized the necessity to change its sales tack. In 1986, it joined the marketplace using its lower-finish Butter Glucose and Bournvita biscuits. Today, company Vice-President Vinod Dhawan admits: "The customer reaction was mixed - they weren't prepared to pay more for that butter flavour and located Bournvita too bitter."
Cadbury's executives now feel they stand an improved chance in the premium finish from the market. This past year Cadbury's launched ChocoBix adopted simply by Divine - an orange biscuit engrossed in wealthy milk chocolate. It claims it's already wrested over 8 percent from the chocolate biscuit segment.
The standard giants will also be not keeping quiet. However, they wish to straddle the whole market. States Sunil L. Alagh, md, Britannia Industries: "We want to 'cream' top of the segment from the market and simultaneously maintain our share of the market within the popular segments."
Getting introduced the elite Good Day and Pure Magic last year, Britannia launched a dirtcheap Circus series priced even less than glucose biscuits. And Patiala-based Bakeman's, the nation's third largest biscuit manufacturer, has become concentrating its marketing efforts on highvalue cream biscuits.
With growing competition, companies have to spend more money on marketing. This season, Indodan will expend about Rs 2 crore on tv and radio advertising wishing to create a dent within the rural market. Alagh of Britannia highlights that 1.5 percent from the company's biscuit sales close to Rs170 crore is allocated to advertising. Attractive packaging too makes up about 15 percent of the all inclusive costs of production.
Kissan has other sales strategies around the cards. It's supplying a 50-paise discount coupon for purchasers who purchase a second pack of biscuits. It's searching for any mere 1 percent be part of the biscuit market. However for a Rs 40-crore company, that will mean adding an additional Rs 12 crore to turnover. Meanwhile, the very first time, Lipton is contemplating the export of biscuits.
Not everybody is overjoyed using these developments. States a little-scale biscuit manufacturer: "With increased large players entering the fray, our earnings are getting squeezed and we're losing hopes of having the ability to 1 day effectively market our very own products.'' Still, which should not unduly worry consumers. They ought to hopefully convey more crunchy choices dads and moms ahead.