About Indian Business Industry

Topics: Brand, Parle-G, Vile Parle Pages: 9 (2660 words) Published: March 13, 2013
Biscuits are a household name these days. The markets are flooded with biscuits of everytaste and for every age group. Sometimes it would be just difficult for us to decide on what togo for. These are good combinations with a hot cup of Tea or a coffee. They make a quick and a tasty snack any time and in any situation.In India per capita consumption of biscuits is estimated at a low 1.5 kg, reflecting the huge potential for growth of the industry. Over 900 million Indians buy and eat biscuits withvarying frequency in any year.The penetration of branded product in this segment is quite significant, and is valued atRs 2,500-3,000 Crore. None of the other wheat-based segments is as developed as the biscuits industry. The biscuit segment has developed with large markets of mass consumptioncovering over 90% of the overall potential market.The Indian biscuits' market is estimated to be 1.1 million tonnes per annum and valued atover Rs 50 billion. The unorganized sector accounts for over 50% of the market. The markethas been growing at a CAGR of 6-7% pa. The present biscuits-bakery sector in India lookslike a battlefront. The battle being led by stalwarts like Britannia and Parle with closecompetition from other companies like ITC, Nutrine, HUL Kissan, Kwality and eveninternational brands like Kellogs, Nestle, Sara Lee and United Biscuits.There are two entrenched players in the biscuits market - Parle

and Britannia have 85% of the market share. Britannia is undoubtedly the leader with brands like Tiger, Little Hearts andMilk Bikis. Britannia's Tiger brand is selling largely in the rural areas which actuallyconstitute 56% of the biscuit market. But in the Glucose segment Parle G is the marketleader. Also players like HLL and ITC have huge presence in the market In India, there is a huge unorganized sector. Biscuits market on an average grew at 8% per annum in the last five years. The rural penetration of the branded biscuits segment is alsosignificant. Towns with populations of less than a lakh contribute significantly to theindustry's turnover, with some estimates placing it at 40%. However, rural markets largelyconsume lower-priced varieties, and it is here that branded biscuits meet with stiff competition from the unorganized sector.The unorganized sector in the biscuits segment does exert pressure on the Pricing policies of the organized players. But only up to a point since the penetration of brands in this businesseven in the rural areas is fairly significant.Therefore, the value for only the branded business segment is more indicative of theindustry's competitive pressures.The duty structure still favors the unorganized sector. Except for select low-priced varieties,the excise duty on biscuits is a hefty 16%. However, bowing to pressure from the Federationof Biscuit Manufacturers of India, 50% of the excise was exempted for biscuits with amaximum retail price of Rs. 5 for a weight not exceeding 100 grams.2 ABOUT THE COMPANYParle Products Pvt. Ltd.

Legal status: CorporationNet worth: US $ 450 MillionYear established: 1929Year started export: 1982Market shareBiscuit segment: 40%Confectionary: 15%Wholesalers: 1500Retail outlets: 4, 25,000Annual sales: 179.9 million kg (in volumes) 3

A long time ago, when the British ruled India, a small factory was set up in the suburbs of Mumbai city, to manufacture sweets and toffees. The year was 1929 and the market wasdominated by famous international brands that were imported freely. Despite the odds andunequal competition, this company called Parle Products, survived and succeeded, byadhering to high quality and improvising from time to time.A decade later, in 1939, Parle Products began manufacturing biscuits, in addition to sweetsand toffees. Having already established a reputation for quality, the Parle brand name grew instrength with this diversification. Parle Glucose and Parle Monaco were the first brands of  biscuits to be introduced,...
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