Sales, Distribution and Retail Management

General portion of report

Industry: Sweet Biscuits, Snack Bars and Fruit Snacks

Company: ITC Group
Brand: Sunfeast

Submitted to: Prof. Asif Zameer

Submitted By - Group 9
Aanchal Gogna 271002
Anuj Kumar Chawwari 271008
Ashika T 271010
Ashutosh Rathi 271011
Himanshi Kandpal 271021
Jay Patel 271024
Shubham Agarwal 261168

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Industry Growth and Trends Over the Last Five Years and Changing
Market Shares
 Sweet biscuits, snack bars and fruit snacks records retail value growth of 10% to
reach INR314.2 billion in 2018.
 Goods and Services Tax (GST) the new tax system introduced by the Indian
government in 2017 was revised in January 2018, resulting in all variants of biscuits
falling under the higher 18% tax bracket. This move triggered a spike in retail unit
prices of biscuits along with snack bars and fruit snacks. Many companies including
the leading biscuits manufacturers Parle Products Pvt Ltd and Britannia Industries
Ltd increased their prices of biscuits in 2018. The rise in tax rates brought plain
biscuits, the most consumed biscuit variant, under the 18% bracket, which affected
the volume sales of biscuits. However, other variants of sweet biscuits enjoy good
growth in retail volume and value because the new tax on these products was
reduced by 3% to 5% from earlier tax rates, which made the products more
affordable Snack bars achieves highest retail value growth of 25% in 2018.
 Average retail unit price of sweet biscuits, snack bars and fruit snacks grows by 7% in
2018
 Healthy living trend drives snack manufacturers to focus on healthy snacks and
Britannia Industries Ltd leads with a 25% retail value share in 2018
Sweet Biscuits, Snack Bars and Fruit Snacks industry in in India

Sweet Biscuits, Snack Bars and Fruit Snacks industry in India (INR million)
314,206.8
285,162.4
260,869.0
238,096.9
212,851.8
193,044.2

2013 2014 2015 2016 2017 2018

Industry growth over last five years (in %)

Year on Year growth of industry in india (%)

11.9
10.3 9.6 10.2
9.3

2013 - 2014 2014 - 2015 2015 - 2016 2016 - 2017 2017 - 2018

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Market share of top company in Sweet Biscuits, Snack Bars and Fruit Snacks industry in
India (in %)
30.0
27.3 26.7
25.8 25.4
24.7 24.6 24.6 25.0
24.8
25.0 24.4

20.0

15.0 13.4 13.4 13.5 13.5

11.0
10.0

5.2
4.5 4.5 4.5 4.6
5.0
2.8 2.6 2.5 2.31.9
1.7 1.7 1.8 2.22.0
1.1 1.3 1.5
0.6 0.9
0.0
2014 2015 2016 2017 2018

Britannia Industries Ltd Parle Products Pvt Ltd ITC Ltd Anmol Biscuits (P) Ltd
Surya Food & Agro Pvt Ltd Saj Industries Pvt Ltd Unibic Foods India Pvt Ltd

Market share of top brands (in %) over last five years in India

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 35.0

30.0
27.3 28.4 26.7 28.6 28.5 28.4
27.7 25.8 25.4 25.0
25.0 23.5 23.1
22.9 22.8 23.0

20.0

15.0 13.4 13.4 13.5 13.5

11.0
10.0

5.2 4.5 4.5 4.5 4.6

5.0
1.72.3 1.72.2 1.82.01.1 1.91.91.3 2.01.91.5
0.6 0.9
0.0
2014 2015 2016 2017 2018

Britannia (Britannia Industries Ltd) Parle (Parle Products Pvt Ltd)

Sunfeast (ITC Group) Anmol (Anmol Biscuits (P) Ltd)
Bisk Farm (Saj Industries Pvt Ltd) Priyagold (Surya Food & Agro Pvt Ltd)
Unibic (Modern Baking Co) Others

Industry and the Company Forecast for the Next Three Years
 Sweet biscuits, snack bars and fruit snacks is expected to record a CAGR of 4% at
constant 2018 prices to reach INR377.6 billion in 2023, if we consider Market selling
price.
 The volume growth of all products except plain biscuits is expected to increase during
the forecast period, while plain biscuits will reach good retail volume sales by the end
of the forecast period.

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 Industry forecast in India in INR millions (by Retail selling price)
500,000.0
443,339.0
450,000.0
409,692.6
400,000.0 376,772.3
344,863.0
350,000.0
300,000.0
250,000.0
200,000.0
150,000.0
100,000.0
50,000.0
0.0
2019 2020 2021 2022

Company Future:

This results in an annual growth rate of 11% based on the most recent earnings level of
₹112.7b to the final forecast of ₹153.9b by 2021. EPS reaches ₹12.55 in the final year of
forecast compared to the current ₹9.26 EPS today. Earnings growth appears to be a result of
reduction in costs rather than purely top-line expansion as earnings are increasing at a faster
rate. Margins are currently sitting at 26%, which is expected to expand to 28% by 2021.

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Identification of major changes in target market profile and consumer
behavior
Super Food Concept Enters into Snacks in India, Creates Demand for Healthy Snacks
Nutrient rich food, colloquially called super food, concept was prevalent in India in the last
few year period with changing consumer lifestyles and eating habits. These food products,
which were predominant in fresh food, packaged meals and staples, are taking over snacks
with the concept of healthy snacks.
Some of the prominent healthy snacks products are fortified sweet biscuits, snack bars and
fruit snacks. These products are not only tasty and can be consumed on the go, they also
replace meals for many educated working individual in urban regions. Healthy snacks such as
snack bars are quick fixes for breakfast, while fortified biscuits are consumed with evening
refreshments and energy replenishments such as dried fruit snacks between meals. These
healthy snacking habits not only reduce calorie intake but also combat hunger pangs.
Young working population strongly embraced the healthy snacking habit and is expected to
create more demand during up coming years as more consumers embrace the super food
culture.
Stronger Growth Forecast Due to Premiumisation Within Sweet Biscuits
The next wave of snacks is evident as consumers are looking for premium products that
include features such as high quality ingredients, exotic flavors, new products and innovative
packaging solutions amongst others.
Like chocolate confectionery, sweet biscuits became the pioneer in premium snack offerings
in India and manufacturers began to offer premium sweet biscuits. Following the premium
sweet biscuits trend, snack bars and fruit snacks segment also saw the entrance of a premium
range of exotic dried fruits while high quality herbal, organic and nutrient-rich snack bars is
becoming popular. The demand for these products is created by consumers who are looking
for new experiences and are ready to pay premium prices for them.
International brands are sold via internet retailing as consumers explore new products that are
available globally. The premium trend will continue and influence the entrance of other snack
varieties during the forecast period and drive the growth of overall premium snack products.
Changing taste preferences, high margins, expansion of modern supermarket chains and
increasing affluence amongst consumers have encouraged the manufacturers to come up with
different kinds of cookies. Due to low income people, large quantity in small packs and wide
distribution network in the rural places, consumption of mass cookies has increased in recent
times, thus increasing the total market of cookies.
With increasing purchasing power, consumers are readily paying for taste and quality
products. For example, ‘Parle’ which previously focused on mass marketing of products
especially plain biscuits is now targeting the niche market as well. The introduction of Parle’s
‘Milano’ cookie is an example of growing demand for center-filled cookies in the country.

Further, recently, in the mid of 2017, ‘Cremica’ introduced its premium cookie “Golden
Bites” in response to growing consumer demand for taste and indulgence. The market is

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rapidly evolving as per consumers changing taste preference towards different variants of
biscuits; the market players are also coming up with product innovation and promotional
strategies to collect the benefits.
Replacing traditional Indian sweets
In India, there are lots of festivals people celebrate. Giving away sweets & chocolates were
used to be a tradition earlier, but due to fear of adulteration in sweets, consumers have shifted
to buy premium cookies in place of sweets. Gifting options pertaining to high-end premium
cookies is a key trend prevalent in metro cities owing to its longer shelf life as compared to
chocolates and sweets. With growing number of manufacturing facilities, retail outlets,
hypermarkets and supermarkets, growth is likely to occur in the cookies biscuit market of the
country in the upcoming years.

References:
a) International, E. and International, E. (2019). Sweet Biscuits, Snack Bars and Fruit Snacks in
India | Market Research Report | Euromonitor. [online] Euromonitor.com. Available at:
https://www.euromonitor.com/sweet-biscuits-snack-bars-and-fruit-snacks-in-india/report
[Accessed 5 Jul. 2019].
b) Indianmirror.com. (2019). Biscuit Industry, Indian Biscuit Industry, Biscuit Industry in India,
Biscuit Industry India. [online] Available at: https://www.indianmirror.com/indian-
industries/biscuit.html [Accessed 5 Jul. 2019].

c) “FNB News - Indian Biscuit Market Projected to Reach $7.25 Billionin next Four Years: FNB
News.” FNB News - Indian Biscuit Market Projected to Reach $7.25 Billionin next Four
Years | FNB News, www.fnbnews.com/Bakery-Biscuits/indian-biscuit-market-projected-to-
reach-725-billionin-next-four-years-42107.

d) Contact@mbarendezvous.com. “Biscuit Industry in India, Manufacturers, GA, General

Awareness...” My Site, www.mbarendezvous.com/general-awareness/biscuit-industry-in-
india/.