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Biscuits buck downtrend

Biscuits buck downtrend

Author | exchange4media News Service | Thursday, Jun 10,2004 8:26 AM

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Biscuits buck downtrend

Going by the latest AC Nielsen India retail store audit data for 2003, Biscuits is one category, which has managed to buck the sluggish FMCG trend.

While most urban-centric categories have fared well, being an under penetrated and almost entirely urban focussed category, the biscuits segment has grown by 11.7 per cent accounting for 7 per cent of the Rs 47,800-crore FMCG sector.

Industry analysts are hopeful the positive trend for biscuits will continue, thanks to the spate of recent launches and entry by a host of smaller regional players apart from ITC's new found aggression in this segment.

The change in the retail scenario has also helped the biscuit brands, since they are no longer stacked away in the back shelves of the smaller kirana stores. Instead, now, biscuits are displayed prominently bagging possibly the largest shelf space at the bigger food retailing stores.

According to Mr A. Sundarajan, Chief Executive, Market Search Pvt Ltd, a market research firm which has done work on the biscuits category, "The growth in the biscuits segment has been primarily due to the new launches and focussed advertising by the leader in the glucose segment - Parle G and even the smaller player, Priya Gold. The hyper- markets have also changed the dynamics of biscuit retailing and their visibility has been heightened by the amount of shelf space occupied by this segment''.

Besides there have been no changes in the pricing of most of the biscuit brands. "The price of the biscuit offerings to the consumer has remain unchanged and in certain brands has even been lowered," observe industry analysts.

New players such as ITC beefing up its distribution in this segment has led to further penetration of the category. "ITC has expanded the biscuits pie. Being a big player, it has helped the category with its reach," claim analysts.

Consider some of the new launches in the past year. While Britannia stretched its Good day brand into more exciting variants, Parle has followed suit by introducing more variants under its Hide & Seek franchise with flavours such as butter, badam pista and cashew. Last year also marked the big entry of HLL into the segment albeit under an unconventional international format with its Kissan Greedy Bistiks brand in three flavours. It also tried to test launch its acquired brand - Modern - as a glucose biscuit brand.

The most significant factor contributing to the growth in the biscuit segment has been its urban-centric focus. "One must remember that all urban categories have seen growth," says Mr Harrish Zaveri, Vice-President Research at Edelweiss Capital. Apart from biscuits, refined oil packs is another such category which is used primarily by the urban markets which has recorded significant growth at 27.2 per cent, according to the AC Nielsen retail audit data for 2003.

But will this `healthy' trend in biscuits' growth continue? "Biscuits as a category will continue to grow but may be not at the same pace," observes an analyst at Motilal Oswal Securities.

Tags: e4m

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