FNB News - Biscuits counts at Rs. 26000 cr

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INTERVIEW

Biscuits counts at Rs. 26000 cr

Wednesday, 07 September, 2016, 08 : 00 AM [IST]

Harcha Bhaskar, Mumbai

Parle Products Pvt. Ltd, the leading biscuits manufacturer in the country, thanks to its iconic Parle G range, has become synonymous with biscuits in India. With its widespread distribution network, the company has maximised its reach garnering the largest market share in the segment. Not resting on past laurels, the company has been expanding and innovating its diverse product range in tune with the growth in bakery and biscuits market in India. B K Rao, deputy marketing manager, Parle Products Pvt. Ltd, in a telephonic interaction with Harcha Bhaskar, highlights how the company has evolved over the years, the expansion in the market and more. Excerpts:

Being dominant in the industry since many decades, how has the biscuits segment in India evolved over the years? What are the factors driving the market?
Parle’s biscuits segment has been growing over the years. Today the company has more than 90 per cent penetration for the biscuits segment. Biscuit is the only rarest FMCG product that has such a high penetration in the consumer market followed by detergent powder and salt. The biscuits industry is growing at higher rate.

The most important factor that contributes to this growth is minimum pricing. The pricing has boosted the growth of biscuits sector in India. Technically speaking, biscuits can be hygienic replacement for a meal and at minimum pricing, specially for person who is on go. The minimum pricing of biscuits is 70-75 per kg. It has been noted if there is no hygienic meal around, people do consume Parle G biscuits.

How are the diverse needs for biscuits taken care of by your company’s product portfolio? Which product/flavour is in demand? How much is the market share of the company for biscuits, at what rate is it growing?
We keep looking for various opportunities to launch new products. Like recently we did launch ‘Dark Bourbon’ keeping the consumer demand and market trend in mind. We have also introduced centre-filled cookies for niche consumers.

Currently, mass cookies are very much in demand by consumers. Then there are premium cookies, followed by cream biscuits and evergreen glucose biscuits that is majorly consumed by people. Our company has 42 per cent of the whole biscuits segment in India and growing at 10 per cent annually.

How big is the biscuits and cookies industry in India and at what rate is the industry growing? Which biscuits - glucose, cream, premium and health - have major share in it?
The current biscuits segment counts at Rs 26,000 crore and is growing at 10-12 per cent per annum. Glucose biscuits have a major market share followed by cookies and cream biscuits.

With the competition in biscuits segment, how does company ensure profit? Is the biscuits segment on the verge of slowdown?
For most of the supermarkets, the supply is directly made by the company to its outlets. There is no involvement of middlemen or distributors. Most of the time, when discount is given, the intention is to increase the footfall. When this happens, the customer not just buys biscuits but happens to buy various other products, which adds to the average amount of the bill. So overall if any loss, it is made up with customers buying other lucrative products.

In rare, there might be an another case wherein product has average sale or is slow moving. This when, supermarkets come up with an offer of buy 2 get 1 free or 10 Rs off per product.

With Patanjali storming the market, according to you, how important is branding and marketing of product?
Patanjali is new in market, they are aggressive and need to be like that at this stage. We, on other hand, prefer to be cautious and alert. We are aware about the market, the competition, and so constantly ensure overall business or market share of our products doesn't get affected from any of it.

Do you have plans to open company retail shops in future? Is there expansion in distribution network for Parle products, if yes, where?
No, as of now. Distribution for Parle is evergrowing process. The total FMCG universe has 9 million outlets in India, out of which our company has presence in 5.5 million outlets.Recently, we rebranded our Marie biscuits, into BakeSmith Marie, to give original touch to the product. The product got well accepted by consumer. New launches are a continuous process for us.

Any new launches in categories such as breads, premium biscuits, muffins? Any new products that you are planning to introduce in the next five years?
Already we have launched various products. We keep looking for various opportunities.

How big is the confectionery market in India? What are the growth prospects for the bakery industry?
The confectionery market counts at Rs 6,000 crore. It is growing at 15% per annum. We are the leader in the market.

How is the response for rusk? Any new product to be launched on the same lines?
The response for rusk is good. So now we have launched milk rusk from elaichi rusk.

According to you, how will GST help bakery and snacks industry in India?
This step from government is positive and will surely benefit the industry. Whatever rate GST would be, we hope it would be win-win situation for both industry and government.

Tell us about your sales share for biscuits, snacks and confectionery. How much is the target for the year 2016-17, what is the growth rate?
We can't reveal the company revenue, but we are growing at 10% pa. Out of the total revenue, 85 per cent of revenue comes from biscuits, 12 per cent from confectionery and 3 per cent from snacks.