Growing the biscuit pie

Biscuits and cookies emerged as preferred snacking options for consumers during the lockdown last year. According to data from Kantar, the segment grew 10% in March-December 2020, as compared to the same period last year, and registered 8.6% growth during the entire year. The growth in 2019 over 2018, meanwhile, was 4.2%. Notably, milk biscuits and marie witnessed a 22% and 17% increase in sales, respectively.

Companies that have a smaller share in the biscuit segment are now ramping up their plans by consolidating their distribution and launching products. Mondelez India, known for its brands Cadbury, Bournvita and Oreo, expanded its biscuit portfolio in 2020 by launching Bournvita Crunchy and Cadbury Chocobakes Choc-filled Cookies; while Bonn Group added new variants under its Americana brand. Mrs Bector’s Food Specialties, which sells products under the Cremica brand, expanded its presence in 90,000 more outlets since March 2020, and plans to launch new biscuit variants.

According to Alvarez & Marsal, the overall biscuit market in India is valued at $5-5.5 billion; in value terms, cookies (like Britannia’s Good Day) command a 35-40% share in it. Plain biscuits, which include marie and milk biscuits, have a 25% share, while cream biscuits and crackers command 15% share each. As per analysts, Parle Products and Britannia command 70% share of the biscuit market in India.

Adding more crunch

For Mondelez India, the biscuit business flourished while the chocolate business — its mainstay — faced headwinds. To tap this growth, the company has introduced new variants and expanded distribution to about two lakh stores in 2020, half of which are in rural India. To appeal to the lower-tier towns and rural areas, the company has introduced low-priced packs.

“As per our strategy, Rs 30 packs are meant to go deep in traditional trade, while multi-packs will be sold in e-commerce and modern trade,” says Sudhanshu Nagpal, associate director, marketing (biscuits), Mondelez India. The company earns about 12-13% of its revenue in India from the biscuits segment.

Apart from its biscuit brand Cremica, Mrs Bector’s Food Specialties supplies buns to QSR chains and sells bakery products under the English Oven brand. The company earned about 37% of its revenue from the biscuit category in FY2020. Although its QSR side of the business suffered last year due to the decline in out-of-home consumption, the biscuit category registered growth — it claims to have a 4.5% share in North India currently. More products, including a “blend of biscuit and snack”, and more stores are on the anvil. “Earlier, we had three products stocked in stores on average; we have now increased it to five,” says Anoop Bector, MD, Mrs Bector’s Food Specialties.

Like other food categories, the biscuit market, too, is riding on the health trend. Bonn Group, which gets about 35-40% of its sales from the biscuit category, launched “healthy” variants under its Americana brand such as Digestive biscuits and Chia & Quinoa Thins. The company has introduced low-unit packs, with an eye on the rural market.

“It is a premium product available at Rs 100-200, but since we want to reach out to the masses, we have kept the prices accessible at Rs 10 and Rs 20,” says Amrinder Singh, director, Bonn Group.

A lot on their plate

While the category has registered growth on the back of the pandemic, could the cookie crumble as the tide turns? According to K Ramakrishnan, MD, South Asia, Kantar Worldpanel, the biggest challenge for biscuit brands would be to keep the momentum of at-home consumption going as out-of-home recovers fully.

For companies eyeing a large share of the market, distribution remains key. Biscuits are sold out of eight million outlets in India, and Parle Products is present in six million retail stores, while Britannia in 2.2 million. “To gain ground in this market, companies need to have a wider portfolio and also wide reach,” says Subhendu Roy, partner, consumer and retail industries, Kearney.

Furthermore, the success of healthy variants will depend on a brand’s ability to take it to the masses. “Although health consciousness is on the rise, it remains a concern to only a certain set of people,” says Rishav Jain, senior director and lead – consumer and retail sector, Alvarez & Marsal.

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