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Of Cookies and Biscuits

February 23, 2011 2 comments

I would be discussing the biscuit and cookies part of the food industry and primarily the leaders in India – Britannia Industries Ltd. The Biscuits industry in India is worth around Rs. 3000 crores and 30% of it belongs to the organized sector. It is the largest among all food industries in the country and is expected to grow at about 15-17% in the years to come.

Within the organized sector, Britannia has been the market leader for a long time now. Parle comes a very close second. ITC entered the market with its SUNFEAST brand of biscuits in 2003.  Though, market share of sunfeast is close to 10%, personally I feel sunfeast is quite a threat to Britannia.

While close to 80% of Parle’s share by volume belongs to Parle-G, and considering the fact that the glucose segment is not a very lucrative part of the biscuit segment, definitely cookies are the game changers. Another segment is that of cream biscuits.

As far as the cookies segment is concerned, Britannia with its GOOD DAY brand of cookies has been a major player since a long time. Cookies were considered a premium brand for a long time and GOOD DAY was no different with SKUs Rs 10 for 81g approximately. Good day has had many successful variants like butter, cashew, pista-badam etc. But recently after the entry of Sunfeast, cookies have become quite cheaper. It all started with Sunfeast introducing its SPECIAL brand of cookies. With a SKU of Rs 5-6 for about 50gm. Britannia eventually had to start cookies at lower price points too and as a result it introduced COOKIES– 56gm for Rs 5. Apart from the ‘elaichi’ variant, a new flavor FRUIT DHAMAKA has also been made available. Though it doesn’t taste like any known fruit, the fruit cuts embedded in the biscuit along with the unique taste is really a treat to the taste buds.

The branding strategy is interesting as usually I have always seen Britannia introduce its ‘cheaper’ biscuits under the TIGER brand. TIGER was first introduced as a brand of Glucose biscuits and it replaced the GLUCOSE-D brand of Britannia. As Tiger grew in popularity among lower income groups because of its low price, Britannia introduced cream biscuits too under Tiger brand. Coming back to COOKIES, Parle has also introduced cookies under the name 20-20. Mc Vitie’s also entered the Indian market with cookies (and also digestive biscuits). At the same time, Australian Biscuit company UNIBIC came to India in 2005 and they majorly sell cookies at a premium price – Anywhere between Rs14-15 for about 67gm.

Cream biscuits have also been very popular. Britannia branded its cream biscuits as CREAM TREAT and also introduced Tiger cream biscuits as mentioned above. Britannia’s most premium brand of biscuits, PURE MAGIC which sells in packs of Rs 20 has been quite popular.  JIM JAM has also been very popular. Pure Magic comes in two variants – Chocolate and Vanilla. Recently I was pleasantly surprised to find a Rs 10 SKU of the old vanilla Pure Magic rebranded as Treat-O. Perhaps, the vanilla variant of Pure Magic is not as successful as the other and Britannia saw sense in repricing it. I am not quite sure of the logic behind the move. Sunfeast also is positioned at both ends of the Cream Biscuit segment. It sells cream biscuits at around the same price as Tiger under the SPECIAL brand and at the same time it competes directly with Pure Magic using the brand ‘Dark Fantasy’. It was launched in 2005 and was positioned as an indulgence brand. It was associated with the master chefs of ITC hotels.

Apart from the above segments, the health segment in biscuits is also gaining importance. With people becoming more and more health conscious, it is imperative that people would like to buy biscuits which are low on fat and more on fibre. Britannia with its NutriChoice brand is making the most of its opportunity. Some older brands like Digestive and Arrowroot have been pulled under this brand. Owing to the fact that the health conscious consumers are ready to pay a premium, this brand is a premium brand.

In conclusion, the overall future of the biscuit market is bright. Particularly for Britannia, though the market share has come down of late, with some intelligent advertising and branding strategies, it can surely gain lost ground. And as far as us consumers are concerned, we have more choice, more variants and really interesting flavours. So just sit back and enjoy your cookies.

References

http://business.mapsofindia.com/india-industry/biscuits.html

http://www.marketresearchdata.org/index.php?option=com_content&view=article&id=63:biscuit-industry-india-&catid=40:food-and-beverage&Itemid=54

http://www.afaqs.com/news/story.html?sid=29162_Sunfeast+Dark+Fantasy:+A+feast+for+the+senses

Categories: Marketing

Handwash anyone?

February 9, 2011 1 comment

The article is about how one of the biggest FMCG companies in the country is yet to explore a product category which has lot of growth potential and the probable reasons for the same. It is more of a personal hypothesis and does not reflect the company’s future plans in any way. The company I am talking about is Procter and Gamble.

Why Handwash? 
After the swine flu (H1N1) reached epidemic proportions last year, a large part of the world stood up and took notice of the hand wash products. Hand washes and Hand swipes finally were being taken seriously. In US for example, the sales of hand sanitizers went up rapidly. In India, hand sanitizers were introduced for the first time. And of course, for the consumers, it was a convenient and healthy proposition as it was more effective and it was much more convenient than using a soap or a handwash (if at all people find that cumbersome).

Let us consider the options PnG has among the already established brands. In personal hygiene and healthcare, there are some product categories which PnG is already into with two very popular brands – Vicks an ‘OTC drugs for cold and cough’ brand and Whisper a ‘feminine health’ brand. These are very specific categories and personally I feel there is still lot of scope in personal hygiene.

If oral health could be considered a part of personal hygiene, PnG is not doing too badly in India. It had acquired Oral-B brand earlier itself and is most probably going to enter the toothpaste category under Oral-B. But strangely enough, CREST in spite of being a popular brand the world over was never introduced in India. I am sure it could have given tough competition to the Colgates and the Pepsodents here in India.

Mothers everywhere would like products which would not only help them ensure complete protection from germs for kids, but also convenience so as the whole process of washing hands is made a bit more interesting. Liquid handwash does this job to a large extent as children would find some amount of novelty factor in the hand wash dispense as against the regular soap. Reckitt Benckiser’s DETTOL and HUL’s LIFEBUOY have the largest market share in this category. How were these brands successful? Dettol since a long time stands for 100% safety and category extension into soaps and handwashes from antiseptic lotion was natural choice to them. Same with Lifebuoy. Lifebuoy with its unique ‘carbolic acid’ odor has been in the public’s mind as health soap. It has been one of HUL’s oldest brands.

But personally I feel, HUL has such a large portfolio of products that had there been no lifebuoy they coud have easily entered the handwash category with the help of other brands. For example, lets us take VASELINE. Vaseline, a petroleum jelly product was always associated with skin care and winter. So when the time came, they extended brand VASELINE to include skin care as well. It was not that skincare was not already an area HUL was looking into. With products like Dove, Lux, Pond’s and Fair and Lovely, they were already hugely into the skin care segment. What I intend to say is Vaseline – though now intuitively seems to be a skin care product it could have been easily extended to something like handwash.

Coming back to PnG, one fact we all will agree to is that PnG has been selling more of premium products and has not been into the middle class market as much as HUL. Hugo Boss, Escada , Lacoste are few such examples. But in India, PnG has been selling goods for middle income markets and by far MACH 3 would be the most premium brand PnG is into. But if at all it wanted to get into the health and hygiene products like handwash, is it possible? One of the easiest and most natural choices would have been to a soap brand (preferably with anti germ properties) which could have been easily used for brand extension. But in its absence, the next obvious choice would be the personal hygiene products which you already have in your portfolio. Definitely VICKS and WHISPER would not help PnG in this regard. Would a brand like CREST or ORAL-B have helped build a personal hygiene brand – even this is debatable. Acquiring some already established brand is another option.

Thus to conclude, I would say that for any FMCG company, it would always help to create brands keeping in mind the bigger picture so as to have more options for brand extension at a later point of time.

References
___________
http://www.dnaindia.com/money/report_p-and-g-near-toothpaste-entry-starts-production-trials-of-oral-b_1437585
http://economictimes.indiatimes.com/news/news-by-industry/cons-products/fmcg/Sanitizer-cos-cashing-in-on-swine-flu-scare/articleshow/5371846.cms

Categories: Marketing
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