““Biscuit INDUSTRY”Biscuit INDUSTRY”  

History of BISCUIT AND Bakery History of BISCUIT AND Bakery IndustryIndustry

The estimated annual production of bakery products in India is in excess of 3 million tonnes, of which bread accounts for nearly 50% and biscuits 37% in volume terms in the organized sector.

The bakery sector in India is one of largest segments of the food processing industries; annual turnover in value terms is approximately $ 900 million.

HISTORY OF BISCUITS INDUSTRY The word 'Biscuit' is derived from the

Latin words 'Bis' (meaning 'twice') and 'Coctus' (meaning cooked or baked). The word 'Biscotti' is also the generic term for cookies in Italian. Back then, biscuits were unleavened, hard and thin wafers which, because of their low water content, were ideal food to store.

The English, Scotch and Dutch immigrants originally brought the first cookies to the United States and they were called teacakes. They were often flavoured with nothing more than the finest butter, sometimes with the addition of a few drops of rose water. Cookies in America were also called by such names as "jumbles", "plunkets" and "cry babies".

BISCUIT INDUSTRY IN INDIA - AN OVERVIEW

Major Brands in BiscuitsMajor Brands in Biscuits

The main players in the organized biscuit industry are as below …

Parle Britannia Sunfeast PriyaGold

And other players in the organized sector are as below……..> Marico > Cremica> Horlics > Dukes> Bisk Farm > Anupam> Anmol > Craze> Elite > Nezone

Annual growth rateAnnual growth rate Annual productionAnnual production

Biscuit Industry Life CycleBiscuit Industry Life Cycle

AGGREGATE INDUSTRY SALES TREND

Year 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Sales 1988.16 2280.76 2581.65 2699.86 2947.83 3376.15 3715.78 3408.26 4309.66 4687.07

AGGREGATE INDUSTRY PRODUCTION TREND

Year 2003-04 2004-05 2005-06 2006-07 2007-08

Annual Prod. Fig. 1.1 1.25 1.42 1.6 1.75

ANNEXURE 1

EXPORTS of Biscuit is estimated to be around 15% of the annual production

during the year 2007-08.

IMPORTS of biscuits into India has not shown any significant growth during the last two years and has not affected production/sales by the Indian Biscuit industry

Current Scenario

 

IBMA estimates annual growth in the range of 25% and above in the event of reduction in the rate of VAT on Biscuits to 4% in 2007-2008.

Opportunities

- Indian Biscuit Manufacturers’ Association (IBMA) estimates annual growth of around 25% in next couple of years.

-The $220 Billion food industry is expected to grow to $300 Billion by 2015.

-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.

-Growing demand of Sugar free cream crackers & diet biscuits

- Opportunity to further grown in Urban & Rural market; Current penetration levels areUrban Market : 75% to 85%Rural Market : 50% to 65%

Why Foreign Big Players are targeting Why Foreign Big Players are targeting Indian Biscuit Industry in India?Indian Biscuit Industry in India?The Nielsen study shows India is the world's leading market

for biscuits, ahead of US ,Mexioco, China and Most of European Countries such as Italy, Germany, Turkey and Spain.

India showed a volume market share of 22%, the second slot was occupied by the US at 13%.

The top three countries -- India, US and Mexico -- contribute over 40% of the total biscuits 10 largest markets for biscuits in volumes sales.

3rd March 2011 Economic Times

Why Foreign Big Players are targeting Indian Why Foreign Big Players are targeting Indian Biscuit Industry in India?Biscuit Industry in India?

Lower Production Cost

Excess to 10 key export markets in Asia through SAARC route

2006 2007 2008 2009 2010 2011

Kraft Closing one of two factories in Melbourne Australia , Suzhou Plant in China started for cost reduction

Kraft had taken over Cadbury in a $19.5 billion deal in February 2010

Exemption from central excise duty on biscuits with MRP up to Rs 100 per kg

Oreo Cookies launch in March 2011. with a local manufacturing units, Kraft Foods has slashed OREO biscuits price tag to Rs 5 for 3 biscuits, Rs 10 for 7 biscuits and Rs 20 for 14 biscuits Kraft business has grown more than 40% in India

Target Export in Asia pacific region through SAARC route and rural market leveraging on Cadbury’s distribution strength

2012

Import Route Oreo Biscuits of Kraft were Rs 50

Why Biscuit Players are targeting Why Biscuit Players are targeting the premium segment?the premium segment?

Glucose segment has already reach to maturity Phase of PLC, no value benefit, Parle the key player who drive profits through economies of Scale

Per capita Consumption 2.5 Per Kg compare to 10Kg of Mature markets like US , Europe

Changing Lifestyle , nuclear family and biscuit being considered as healthier option compare to other fast food segments now a days

Rising disposable income has increased the consumer expectation , Cookies and Nutri and digestive segment considered as good option

Early 2010

Dec 2010

20102011

Pepsico Launch Aliva in 2010

Oreo Cookies launch in March 2011.

United Biscuits (UK) Manufacturing base in Himachal Pradesh launch MC Vities , Also Provide fresh cookies tie up with Food Bazar

2010, Britannia launched the Nutri Choice

Why Parle G is still most preferred brand in Why Parle G is still most preferred brand in Glucose segment ?Glucose segment ?

Demand from rural markets, accounting for half the biscuit sales in India, is growing at 20 to 25 per cent a year. Rural markets account for around 30 per cent of revenues for Britannia and Parle, and over 50 per cent for regional brands.