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Travel Packs, Premium Products Driving Growth Of Biscuit Makers The demand for healthy and clean-label products, such as gluten-free, low-calorie, low-fat, and high-fiber biscuits, are the main factors driving the market's growth

By Shrabona Ghosh

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At the end-of-day, sipping a kulhad of piping hot tea with a crusty, flaky biscuit is the most palatable form of a desi indulgence, we Indians look forward to. The origin of these crispy biscuits dates back to the 16th century with the arrival of the Mughals, who wanted dry, nutritious snacks served to their armies. From the 16th Century to 21st Century, biscuits have invaded the shelves of every household kitchen.

Over the years, consumption has evolved through formats, flavours, ingredients and allowed the category to operate at scale across multiple price points. The industry has created access and consumption through availability at low price points and increasing 'moments of consumption' (e.g., cream biscuits/ equivalent as an ingredient in other foods).

The demand for healthy and clean-label products, such as gluten-free, low-calorie, low-fat, and high-fiber biscuits, are the main factors driving the market's growth. The introduction of innovative products in various flavors, textures, and shapes, and the easy product availability on online platforms are some of the major factors propelling the market.

Biscuit as a revenue generator

India biscuits market size was estimated at USD 3.19 billion in 2022. During the forecast period between 2023 and 2029, the market size is projected to grow at a CAGR of 4.13 per cent reaching a value of USD 4.078 billion by 2029, said Blueweaveconsulting firm in its report.

India's FMCG industry saw a +9 per cent value growth in the third quarter of 2023, fueled by volume growth. This indicates positive consumption patterns in India as inflationary pressures ease and price increases slow down compared to the previous quarter. These shifts helped increase the spending power of consumers, especially those in rural markets where consumption has increased across categories. Categories including impulse foods have shown strong growth, habit-forming categories such as Biscuits, Tea, Noodles, and Coffee, recovered growth in Q3 2023, said a report by NIQ.

Biscuits have been a top revenue generating category in FMCG companies overall growth. SAJ Food Products, which is India's fourth-largest biscuit and bakery brand, aims to achieve a revenue milestone of INR 5,000 crore by FY29, aligning with its vision to transform its flagship brand, BISK FARM, into a truly national brand. "Biscuits contribute the bulk of our revenue. We are the second largest biscuit producer in the Eastern part of India, and apart from the East, Karnataka is another state which contributes to our significant sales," said Vijay Singh, MD, Bisk Farm.

"We want to be the third biggest biscuit producer in the next five years. To achieve this, we need to grow at a speed of almost 20 per cent on a category basis and hit that number, which is realistically possible," Singh added.

For Haldirams, the cookie category currently contributes a modest portion of its overall business revenue, with urban markets contributing approximately 80 per cent and rural markets contributing around 20 per cent. "Overall, the cookie category accounts for approximately 5 per cent or less of our total sales. While it remains a significant segment within our product portfolio, our business revenue is predominantly driven by other categories. As we continue to assess market dynamics and explore growth opportunities, we remain committed to enhancing the relevance of our cookie offerings in alignment with our broader business objectives," said Sushil Aggarwal, director at Haldiram Foods International Pvt Ltd.

The biscuit industry is highly competitive, with numerous players vying for market share. To stay competitive, companies can differentiate their products through branding, packaging, and marketing strategies. They can also focus on building strong relationships with retailers and distributors to ensure their products are readily available to consumers. Supply chain disruptions, such as raw material shortages or transportation issues, can impact production and distribution capabilities. "To mitigate these risks, companies can diversify their supplier base, maintain adequate inventory levels, and invest in technology to improve supply chain visibility and agility," said a spokesperson from TechSci Research, a global market research and consulting service provider.

As of 2023, Britannia had the highest market share of 31 per cent among the biscuit companies in India. Parle followed, with a 29 percent market share during the same period. ITC was another major player in the industry; and these three leading companies captured more than 70 percent of the market share, according to Statista, a market research firm.

Data source: Statista

Premium, artisanals and travel packs

The biscuit category has evolved over the years, nowadays, people see biscuits as quick snacks for mid-meals or even as mini-meals when sudden hunger strikes. The shift in consumer behavior and preferences has led to a lot of innovation and experimentation in the biscuit industry. Now, you can find biscuits in many flavors and types: dry fruit cookies, fruit-flavoured cream-filled biscuits, and much more

There has been a significant shift in consumer behavior post-pandemic with regards to biscuit consumption. While premium and artisanal products currently hold limited significance within the biscuit category, the evolving consumer preferences suggest potential opportunities for innovation and diversification in the future.

For Haldirams, premium and artisanal products in the biscuit category, such as Pista Badam cookies, are gaining traction due to increased demand for healthier and gourmet options. While their exact contribution to overall sales varies, these offerings play a pivotal role in catering to discerning consumers seeking superior ingredients and unique flavors. People have become more health-conscious post-pandemic resulting in a rise in demand for healthier biscuit options such as multigrain, vegan, or sugar free biscuits and cookies. Concurrently, there's a growing preference for smaller pack sizes or travel packs, catering to the changing lifestyles and on-the-go consumption patterns, "As consumers prioritize health and gourmet experiences, the significance of premium and artisanal products is expected to continue to rise, driving growth and innovation within the biscuit market," Aggarwal added.

In a mass biscuit market, premium and artisanal biscuits offer differentiation. They often boast unique flavors, textures, or ingredient combinations not found in mass-produced biscuits, appealing to consumers looking for something distinctive. Artisanal biscuits often emphasize traditional recipes, craftsmanship, and small-batch production techniques, appealing to consumers who appreciate authenticity and the story behind the product.

BISK FARM also banks on its premium products, "We have a complete premium segment and we believe that the future of any company's existence depends on its premiumness. So, there is an absolute effort to grow our premium portfolio, product categories in the segment to keep the growth momentum. In the premium space, the margins of the companies are protected, whereas, in the mass category, the margins are not protected.It's imperative for us to be out in the space and to do good," said Vijay Singh, MD, Bisk Farm.

Growing with innovations

To stay ahead of the curve, one should be focused on innovating in response to evolving market demands. While traditional favorites like Gorus or Atta cookies remain popular, "We've also introduced fusion options like chocolate chip cookies to cater to diverse consumer preferences. Our approach emphasizes aligning product offerings with customer needs while maintaining synergy between traditional and contemporary tastes. By continuously adapting to changing consumer trends and expanding our product range, we ensure that we remain competitive and relevant in the dynamic biscuit/cookies market landscape," explained Aggarwal.

Functional biscuits form an important part of innovative product development, these offer additional health benefits beyond basic nutrition. These may include biscuits fortified with vitamins, minerals, antioxidants, or probiotics, aiming to address specific health concerns such as digestion, immunity, or energy. Packaging plays a crucial role in product differentiation and consumer convenience. "Some innovations in biscuit packaging include resealable pouches for better freshness, single-serve packaging for on-the-go consumption, and eco-friendly packaging materials to reduce environmental impact," added TechSci Research spokesperson.

Innovation in the category has been in many places ranging from making the products healthier to making them more indulgent to making them available at lower price points through innovative price-pack architecture.

"Going forward, the K-shaped consumption is likely to continue playing out with different cohorts of consumers demanding premium/range/health and accessibility at low price points. Growth and profitability continue to remain the key challenges, both for scaled brands that need to win in the masses and niche brands who need to spend disproportionately to acquire new customers. Finally, with social media based KOLs putting the spotlight on brand communication/ claims, it will be very important to back up what is said definitively," said Nikhil Sethi, national head – FMCG, KPMG in India.

Shrabona Ghosh

Correspondent

A journalist with a cosmopolitan mindset. I lead a project called 'Corporate Innovations' wherein I cover corporates across verticals and try to tell stories on innovations. Apart from this, I write industry pieces on FMCGs, auto, aviation, 5G and defense. 
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