SUBMITTED BY:
SHRUTI KAMBOJ

---

[attachment=12663]
OVERVIEW OF THE INDUSTRY
The Indian economy continues to grow at a healthy pace with a 6.9% growth in the financial year 2005-06 on the back of robust showing by manufacturing and service sectors.
Within FMCG’s, the biscuit industry showed a robust volume growth last year. The organized and branded biscuit industry in India is currently estimated at around 900,000 tonnes having grown 12% last year, as compared to the 7% growth of the FMCG sector. New players have entered the market at the national level and the regional level, making the industry dynamic and very competitive. Aggressive pricing activity, trade and consumer promotions have pulled down the overall pricing power of the brands in the market. This needs to be managed through the strong margin management measures in order to sustain profitability in the industry. In last year alone, the key input costs increased by 12-15%.
The per capita consumption continues to grow across all age groups and socio-economic strata. Biscuits continue to maintain their position as one of the most widely distributed and available packaged food categories in India. 38% of the total volume comes from the rural markets though this number varies by type of biscuit, with glucose being the most widely distributed in rural markets at 50% overall sales. The market has also migrated towards bulk and family packs that offer better value for money on a per kg basis.
OVERVIEW OF BRITANNIA INDUSTRIES LTD
Baking practices were well known to Indian cuisine for thousands of years, but the humble biscuit became a familiar and commonplace item of diet only during the 20th century. The products and marketing strategies of India’s premier food company Britannia Industries. Limited over the last century have been responsible for this remarkable dietary acculturation.
The entire biscuits’ market is estimated to be 1.1 million tonnes per annum, and valued at over Rs. 50 billion.
The biscuits segment enjoys one of the most developed markets for any item of mass consumption, covering over 90 per cent of the overall potential market. This implies that over 900 million Indians buy and eat biscuits, with varying frequency in any year. The market is highly competitive at the supply-side, with thousands of small-scale manufacturers as well as others in the organized, large-scale sector.
The strength of the Britannia brand is demonstrated by the fact that it stands far above all in this fiercely competitive market, with over 46 per cent market share, by value (Source: ACNielsen ORG-MARG 2003).
ACHIEVEMENTS
Britannia is synonymous with the rise and growth of the biscuit industry in India.
Throughout this process it has displayed an uncanny intuition about emerging popular tastes for biscuits. This foresight, coupled with the will to innovate and evolve new products, has been the impetus that has propelled the Britannia brand ahead of the rest. Being the market leader, Britannia Industries operates under an underlying principle of setting its own rules and standards that have almost always become the adopted paradigm for the entire biscuit industry.
It brought the health dimension to an industry that was traditionally driven by taste alone. This is reflected in Britannia’s brand slogan, introduced in 1997 that exhorted consumers to ‘Eat Healthy, Think Better’. This was quickly embraced by the entire industry to come up with similar promotional campaigns showing biscuits to be an epitome of a healthy, happy diet.
Going beyond biscuits has been the most difficult challenge and a litmus test for the company. Britannia entered the dairy category with the launch of Britannia Milkman range of dairy products. With the success of Britannia Milkman Cheese, it achieved a niche for itself in a category that was defined by a competitor that had created the category.
- Britannia’s products retail in over 2 million outlets (Source: ACNielsen ORG-MARG, 2003), selling approximately 200 million packs a month.
- With millions of happy consumers every month, Britannia is considered to be one of the most trusted food brands in India (Source: ET Brand Equity Study, 2003).
- Britannia has also successively made the Forbes List of 200 Best Small Companies in the world for the years 1999, 2000 and 2002.
SEGMENT-WISE PERFORMANCE
The primary business segment of the company is bakery, which consists of biscuits, bread and cakes. The overall sales have improved by 11% in volume and 10% in value during the year 2005-06.
-The Biscuit volume grew 12% and its value 10%.
-Bread volume grew 4% and its value 6%.
-Cake and Rusk volume grew 28% and their value 24%.