Britannia edges past Parle as top biscuit company

Britannia edges past Parle as top biscuit company
Namrata Singh & Boby Kurian, TNN | May 30, 2015
Varun Berry of Britannia

MUMBAI: Having been dominated by a formidable leader like Parle for several years, Britannia Industries is finally having a day in the sun.

The Rs 25,000 crore biscuits market has seen some shake up in the last couple of months with the Nusli Wadia run Britannia Industries overtaking Parle Products by a slender margin to become a leader.

Britannia's market share was a little over 28% in value terms in April this year, while Parle's value share during the month stood at a little over 27.5%. This gives Britannia a 0.5% edge over Parle, multiple sources confirmed to TOI, while quoting all-India Nielsen numbers. Britannia, sources said, started developing a tentative lead over Parle in the preceding months of February and March this year and it has continued to build on the same.

Parle, however, dominates the market on an annual basis both in terms of value as well as volumes. Given its ubiquitous Parle G biscuit, it's difficult for a rival to beat Parle at the volume game. The Vijay Chauhan and Sharad Chauhan-controlled firm, which is the pioneer in biscuits, is understood to have taken a beating due to a dull market scenario with respect to glucose biscuits. The company now appears to be taking efforts to claw back lost share by targeting kids with a series of exclusive packs.

Britannia has been in a rejig mode after Wadia installed Varun Berry, a Unilever and Pepsi veteran, as the new managing director. The company, in which French food and dairy giant Danone, was an equal partner till some years ago had faced pressure in holding its share of market and also dragged in profitability.

Industry watchers said Britannia had wrested a similar tentative lead over Parle more than a decade ago but couldn't keep a grasp on it for long. For Britannia, big brands like Good Day and NutriChoice have been the growth drivers in recent quarters, each gaining about 1% share in overall biscuits market.

Britannia attributes its success to its people. "The mandate was to shore up profitability and growth. The one factor that's made market leadership possible, if you ask me, is people. We picked up the right people for senior functions and made them perform much bigger roles than they were doing. This provided some accelerated learning besides pushing us out of the comfort zones," Berry told TOI.

Eleven senior executives now report directly to Berry, out of which eight are experienced Britannia hands. "Some of them were even two levels below the work they are doing currently. But the decision is paying off," he said.

Berry, who declined to discuss specific numbers, said he would like to see the company push for a bigger lead in a three way contest with Parle and ITC Foods. In the last decade, a lot has changed in the biscuit sweepstakes with new entrant ITC pushing existing players to continuously reinvent their portfolios. ITC today has a share of around 11% which has inched up year on year even as both Britannia and Parle have come off their peaks of around 33-35% share of the market which they held a few years ago.

In the cream biscuits segment, however, it's an entirely different story. ITC leads the cream biscuit segment with a share of around 27%, followed by Britannia at around 18% and Parle at roughly 14%. ITC's foods business migrated the popular range of cream biscuits under a new sub-brand 'Bounce' which has emerged as the largest cream brand in the industry.

For Parle, a change in marketing strategy is evident in the premium biscuits segment with several new launches including Parle Rusk, Parle Hide & Seek Black Bourbon, Parle Happy Dual cream and Parle Milano Centre filled cookies.

Berry said the company pushed premiumization and worked up product and marketing innovations while slashing trade discounts and overhead costs. "We were sufficiently warned against cutting back on discounts, but took that bold decision," he added.

It experimented with social media platforms like Twitter to engage with customers on recent launches like Pure Magic Chocolush, NutriChoice Heavens and Britannia Chunkies. It debuted some of them exclusively on Amazon, in a first for Indian FMCG.

"We still have only single digit shares in many value segments. But we believe there's enough scope for premiumizing and driving growth there as well," Berry said.





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