Bakery and confectionery final

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  • ANNEXURE 1
  • Bakery and confectionery final

    1. 1. “ Biscuit INDUSTRY”  
    2. 2. History of BISCUIT AND Bakery Industry <ul><li>The estimated annual production of bakery products in India is in excess of 3 million tonnes, of which bread accounts for nearly 50% and biscuits 37% in volume terms in the organized sector. </li></ul><ul><li>The bakery sector in India is one of largest segments of the food processing industries; annual turnover in value terms is approximately $ 900 million. </li></ul>
    3. 3. HISTORY OF BISCUITS INDUSTRY <ul><li>The word 'Biscuit' is derived from the Latin words 'Bis' (meaning 'twice') and 'Coctus' (meaning cooked or baked). The word 'Biscotti' is also the generic term for cookies in Italian. Back then, biscuits were unleavened, hard and thin wafers which, because of their low water content, were ideal food to store. </li></ul><ul><li>The English, Scotch and Dutch immigrants originally brought the first cookies to the United States and they were called teacakes. They were often flavoured with nothing more than the finest butter, sometimes with the addition of a few drops of rose water. Cookies in America were also called by such names as &quot;jumbles&quot;, &quot;plunkets&quot; and &quot;cry babies&quot;. </li></ul>
    4. 4. BISCUIT INDUSTRY IN INDIA - AN OVERVIEW <ul><li>Biscuit industry Production </li></ul><ul><li>Organized Sector 60% </li></ul><ul><li>Unorganised Sector : 40% </li></ul><ul><li>R ural-urban penetration of Biscuit : </li></ul><ul><li>Urban Market : 75% to 85% Rural Market : 50% to 65% The major Brands of biscuits in organized sector are - Britannia, ParleBakeman, PriyaGold, Elite, Cremica, Dukes, Anupam, Horlicks, Craze, Nezone, besides various regional/State brands. </li></ul><ul><li>The unorganized sector is estimated to have approximately 30,000 small & tiny bakeries across the country. </li></ul><ul><li>According to the NCAER Study, biscuit is predominantly consumed by people from the lower strata of society, particularly children in both rural and urban areas with an average monthly income of Rs. 750.00. </li></ul>
    5. 5. BISCUIT INDUSTRY IN INDIA - AN OVERVIEW
    6. 6. Major Brands in Biscuits <ul><li>The main players in the organized biscuit industry are as below … </li></ul><ul><li>Parle </li></ul><ul><li>Britannia </li></ul><ul><li>Sunfeast </li></ul><ul><li>PriyaGold </li></ul><ul><li>And other players in the organized sector are as below…….. </li></ul><ul><ul><li>> Marico > Cremica </li></ul></ul><ul><ul><li>> Horlics > Dukes </li></ul></ul><ul><ul><li>> Bisk Farm > Anupam </li></ul></ul><ul><ul><li>> Anmol > Craze </li></ul></ul><ul><ul><li>> Elite > Nezone </li></ul></ul>
    7. 7. <ul><li>Annual growth rate </li></ul><ul><li>Annual production </li></ul>
    8. 8. Biscuit Industry Life Cycle
    9. 9. AGGREGATE INDUSTRY SALES TREND Year 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Sales 1988.16 2280.76 2581.65 2699.86 2947.83 3376.15 3715.78 3408.26 4309.66 4687.07
    10. 10. AGGREGATE INDUSTRY PRODUCTION TREND Year 2003-04 2004-05 2005-06 2006-07 2007-08 Annual Prod. Fig. 1.1 1.25 1.42 1.6 1.75
    11. 11. <ul><li>EXPORTS of Biscuit is estimated to be around 15% of the annual production </li></ul><ul><li>during the year 2007-08. </li></ul><ul><li>IMPORTS of biscuits into India has not shown any significant growth during the last two years and has not affected production/sales by the Indian Biscuit industry </li></ul>ANNEXURE 1
    12. 12. Current Scenario <ul><li>  </li></ul><ul><li>IBMA estimates annual growth in the range of 25% and above in the event of reduction in the rate of VAT on Biscuits to 4% in 2007-2008. </li></ul>
    13. 15. <ul><li>Opportunities </li></ul><ul><li>- Indian Biscuit Manufacturers’ Association (IBMA) estimates annual growth of around 25% in next couple of years. </li></ul><ul><li>The $220 Billion food industry is expected to grow to $300 Billion by 2015. </li></ul><ul><li>Per capita consumption of Biscuits in the country is only 1.8 kg as compared to 2.5 kg to 5.5 kg in South East Asian countries and European countries, and 7.5 kg in USA. </li></ul><ul><li>Growing demand of Sugar free cream crackers & diet biscuits </li></ul><ul><li>- Opportunity to further grown in Urban & Rural market; Current penetration levels are </li></ul><ul><li>Urban Market : 75% to 85% </li></ul><ul><li>Rural Market : 50% to 65% </li></ul>
    14. 16. Analysis <ul><li>Opportunities </li></ul><ul><li>- Indian Biscuit Manufacturers’ Association (IBMA) estimates annual growth of around 20% in next couple of years. </li></ul><ul><li>The $220 Billion food industry is expected to grow to $300 Billion by 2015. </li></ul><ul><li>Per capita consumption of Biscuits in the country is only 1.8 kg as compared to 2.5 kg to 5.5 kg in South East Asian countries and European countries, and 7.5 kg in USA. </li></ul><ul><li>Growing demand of Sugar free cream crackers & diet biscuits </li></ul><ul><li>- Opportunity to further grown in Urban & Rural market; Current penetration levels are </li></ul><ul><li>Urban Market : 75% to 85% </li></ul><ul><li>Rural Market : 50% to 65% </li></ul>Threats - Fluctuations in the prices of transportation costs & distribution cost due to high wages and oil prices - Entry of ITC (having very good distribution channels) are considered as threat for existing biscuit industry players. - Substitute products are also considered as a biggest threat for biscuit industry
    15. 18. Why Foreign Big Players are targeting Indian Biscuit Industry in India? <ul><li>The Nielsen study shows India is the world's leading market for biscuits, ahead of US ,Mexioco, China and Most of European Countries such as Italy, Germany, Turkey and Spain. </li></ul><ul><li>India showed a volume market share of 22%, the second slot was occupied by the US at 13%. </li></ul><ul><li>The top three countries -- India, US and Mexico -- contribute over 40% of the total biscuits 10 largest markets for biscuits in volumes sales. </li></ul>3 rd March 2011 Economic Times
    16. 19. Why Foreign Big Players are targeting Indian Biscuit Industry in India? <ul><li>Lower Production Cost </li></ul><ul><li>Excess to 10 key export markets in Asia through SAARC route </li></ul>
    17. 20. 2006 2007 2008 2009 2010 2011 Kraft Closing one of two factories in Melbourne Australia , Suzhou Plant in China started for cost reduction Kraft had taken over Cadbury in a $19.5 billion deal in February 2010 Exemption from central excise duty on biscuits with MRP up to Rs 100 per kg Oreo Cookies launch in March 2011. with a local manufacturing units, Kraft Foods has slashed OREO biscuits price tag to Rs 5 for 3 biscuits, Rs 10 for 7 biscuits and Rs 20 for 14 biscuits Kraft business has grown more than 40% in India Target Export in Asia pacific region through SAARC route and rural market leveraging on Cadbury’s distribution strength 2012 Import Route Oreo Biscuits of Kraft were Rs 50
    18. 21. Why Biscuit Players are targeting the premium segment? <ul><li>Glucose segment has already reach to maturity Phase of PLC, no value benefit, Parle the key player who drive profits through economies of Scale </li></ul><ul><li>Per capita Consumption 2.5 Per Kg compare to 10Kg of Mature markets like US , Europe </li></ul><ul><li>Changing Lifestyle , nuclear family and biscuit being considered as healthier option compare to other fast food segments now a days </li></ul><ul><li>Rising disposable income has increased the consumer expectation , Cookies and Nutri and digestive segment considered as good option </li></ul>
    19. 22. Early 2010 Dec 2010 2010 2011 Pepsico Launch Aliva in 2010 Oreo Cookies launch in March 2011. United Biscuits (UK) Manufacturing base in Himachal Pradesh launch MC Vities , Also Provide fresh cookies tie up with Food Bazar 2010, Britannia launched the Nutri Choice
    20. 23. Why Parle G is still most preferred brand in Glucose segment ?
    21. 24. KEY SUCESS FACTORS & THRESHOLD FACTORS <ul><li>KSFs </li></ul><ul><li>Price </li></ul><ul><ul><li>large no. Of price sensitive consumers specially in rural areas. </li></ul></ul><ul><li>Distribution Network </li></ul><ul><ul><li>Biscuit is a FMCG product, it requires to reach each and every area of the country. </li></ul></ul><ul><li>Nutrition content </li></ul><ul><ul><li>Biscuit should contain healthy and hygiene ingredients. </li></ul></ul><ul><li>Brand </li></ul><ul><ul><li>Strong brand name play vital role in biscuit industry to compete specially in organized sector. </li></ul></ul><ul><li>Innovation </li></ul><ul><ul><li>It is mandatory to come up with new brands, flavours, packaging, size, shapes etc. at regular intervals. </li></ul></ul><ul><li>Threshold </li></ul><ul><li>Technology </li></ul><ul><ul><li>In the industry it is required for existing players to adopt new and advance technology specially in organized sector. </li></ul></ul><ul><li>Change in consumer taste and preferences. </li></ul>
    22. 25. <ul><li>Demand from rural markets, accounting for half the biscuit sales in India, is growing at 20 to 25 per cent a year. Rural markets account for around 30 per cent of revenues for Britannia and Parle, and over 50 per cent for regional brands. </li></ul>

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