From the ‘glucose biscuits’ that became customary with tea in Indian households to the emergence of premium biscuits that promise ‘less sugar’ and ‘more fibre’, the category has evolved and how. But even as manufacturers such as Britannia, Parle and ITC are upping their premium offerings, the plain biscuits segment continues to drive growth in the category.
Sameer Shukla, ED – retail measurement services, Nielsen South Asia, says that the biscuits category in India has grown 9.7% over the last five years, and that the plain biscuits segment (Marie, milk, glucose and arrowroot varieties), accounts for around 40% of the total biscuits sales.
The lure of premium
Mintel estimates that 57% of consumers in India have consumed glucose biscuits (the highest share in the biscuit category) in the last six months; 49% have consumed salted biscuits/crackers and 44% have had cream-filled biscuits. Shekhar Agarwal, director, Surya Food & Agro (manufacturers of Priyagold), believes plain biscuits are “almost a necessity”. “Biscuits are like bread and butter in terms of being necessary in the consumer’s life. But they are open to newer varieties.”
Britannia’s annual report for FY18 mentions its relentless focus on ‘premiumisation and democratisation’ for bakery products (of which biscuits are a part). Making premium products available at affordable price points has increased reach for the brand, whereas low unit packs have become significant growth drivers for its portfolio as they work well in rural markets and serve the convenience-seeking consumer in urban regions.
Mayank Shah, category head – biscuits, Parle Products, concurs. “Around 15 years back, plain biscuits contributed 95% to our revenue. Today, this has gone down to 65-70%.” Parle’s plain biscuit segment is growing at 10-12% (as against 20-25% for premium), and Priyagold’s at 8-9%. Both brands see a huge potential for growth in tier II markets and beyond, owing to their distribution network.
Dhanraj Bhagat, partner, Grant Thornton India, states that this dip in growth rate in the face of premiumisation is not surprising. “The growth rates in the plain biscuits segment may slow down a bit, but will continue to grow. Because of the volume-driven nature of the category and the huge rural base of the country, the plain segment will always find a place.”
Packing more crunch
Although Parle’s move into the premium segment is here to stay, Shah adds the company will continue to focus on the plain variety as that is its basic/staple product — which consumers in the category keep coming back to. In this segment, there is a risk of consumers being disenchanted by the usual offerings.
ITC Sunfeast’s strategy to breathe life into the plain segment is to bring what could otherwise have been a premium offering within the price bracket of a plain biscuit offering. Paritosh Wali, COO – biscuits and confections cluster, foods division, ITC, says, “`5 and `10 are undoubtedly the most common price points for biscuits, with `10 observing an accelerated growth over the last few years. We recently launched Dark Fantasy at the price point of `10. Even in the health biscuits space, we recently introduced Sunfeast Farmlite Protein Power at `10.”
Sunfeast has also launched Marie Light Vita in a ‘stay fresh’ pack — two inner packs inside one larger pack. “This ensures lesser breakage, is convenient to store and keeps the product fresh even after the seal of the outer pack is broken,” Wali explains.
Meanwhile, Priyagold’s solution for making the segment exciting is to introduce two or three new varieties in a year on an average, while keeping the price at `5 or `10 per pack.
Shukla points out that while new launches in the ‘plains’ segment have not been very successful, “multiple repositioning of old brands has brought in good traction with the Indian consumers”. Parle, that earlier had two cracker varieties, has seven to eight varieties today. “Premium biscuits are good for a change; something you will want to consume occasionally, but you cannot make something like a cream biscuit relevant for tea time. And therefore, you go back to plain biscuits,” says Shah.