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Biscuit Market in India

G Amarnath

Biscuits has been a primary product of consumption since ages in households. In olden days grandmother used to prepare the dough and give to the bakery to be prepared by a crisp bake process. Thus biscuits from long have been a complementary snack with beverages. Biscuits have been a part of regular food habits and are the most accepted among all other vittles. Biscuits score well on two factors - nutrition and nourishment - as baking is not considered to be harmful as opposed to frying in oil.

Biscuit, one of the highest selling products in the convenience foods category is popular across all places in the world. Biscuits are consumed by various people from different walks of life. The first introduction of biscuit was in the early 1920s by Britannia Industries. The biscuit market has well passed the introduction and growth stages and well into maturity.

The largest segment occupying almost half of the market are the sweet biscuit, which is further sub grouped into popular sweet and premium sweet biscuits. The popular sweet segment consists of only the generic glucose biscuits; whereas the other subgroup, premium sweet, has fifteen brands from Britannia and others from Parle and Cadburys.

Almost as widely consumed as sweet are the semi-sweet biscuits headed by Marie and followed by Auroroot and other varieties. The cream of the market literally belongs to cream biscuits where chocolate cream is most favoured with a definite demand for orange, pineapple and elachi flavours. A different aspect comes from the Craker biscuits type marketed by Monaco, Krackjack, etc., which despite the underlying sweetness, have a salt flavour. With a wide range available, the basis of positioning must only be on taste differences.

India holds the second largest production of biscuits after the US. Biscuit sales are growing every year by seven per cent. However, cream and chocolate segment is growing at 20 per cent per annum. Profit margins in the upper segment is five per cent of turnover against one per cent in the cheaper cream biscuits. Distribution network is quite impressive with 5.5 lakh wholesalers and 8.5 lakh retailers. One million tonnes of biscuits are manufactured every year in India. Out of which 3.5 lakh tonnes from the organised sector and the rest by the unorganised sector. Thus, the unorganised biscuit sector in India is twice the size of the organised sector, in terms of volume.

Consumption of biscuits is more in rural areas ( 55 per cent) than urban areas. Biscuit turnover works out to more than Rs 2000 crore per year. It is interesting to note that 37 per cent of the consumption is by low-income group. In India, region wise, biscuit preference does vary to a great extent. North and West India have shares of 70 percent and 65 per cent respectively of sweet varieties. The eastern region prefers the Cracker variety with consumption of 35 per cent. While South prefers milk varieties which contribute 27 per cent of the sales.