Biscuit Industry in India

BISCUIT INDUSTRY IN INDIA

Biscuit industry in India in the organized sector produces around 60% of the total production, the

balance 40% being contributed by the unorganized bakeries. The industry consists of two large

scale manufacturers, around 50 medium scale brands and small scale units ranging up to 2500

units in the country, as at 2000- 01. The unorganized sector is estimated to have approximately

30,000 small & tiny bakeries across the country.

The annual turnover of the organized sector of the biscuit manufacturers (as at 2007-08) is Rs. 4,350 crores.

In terms of volume biscuit production by the organized segment in 2007-08 is estimated at 1.30

million tonnes. The major Brands of biscuits are - Britannia, Parle Bakeman, Parle G, Elite,

Cremica, Dukes, Anupam, Craze, Nezone, besides various regional/State brands.

Biscuit industry which was till then reserved in the SSI (Small Scale Industry) Sector, was

unreserved in 1997-98, in accordance with the Govt Policy, based on the recommendations of the

Abid Hussain Committee.

The annual production of biscuit in the organized sector, continues to be predominantly in the

small and medium sale sector before and after de- reservation. The annual production was

around 7.4 Lakh tonnes in 1997-98 In the next five years, biscuit production witnessed an annual

growth of 10% to 12%, up to 1999-00.

The annual Growth showed a decline of 3.5% in 2000-01, mainly due to 100% hike in Central

Excise Duty (from 9% to 16%). Production in the year 2001-02 increased very marginally by

2.75% where in 2002-03 the growth is around 3%

The Union Budget for 2005-06 granted 50% reduction in the rate of Excise Duty on Biscuit i.e.

from 16% to 8%. The Federation's estimate for the current year indicates a growth of

approximately 8% to 9%.

However the average utilization of installed capacity by biscuit manufacturers in

the country has been a dismal 60% over the last decade up to 2006-07.

Though dereservation resulted in a few MNCs, i.e. Sara Lee, Kellogs SmithKline Beecham,

Heinz etc entering the biscuit industry in India, most of them, with the exception of SmithKline

Beecham (Horlicks Biscuits), have ceased production in the country.

On the other hand, import of biscuits, specially in the high price segment has started from 2000-

01, but however, the quantum of imports has not so far increased alarmingly and has remained at

around 3.75% of the consumption of biscuits in the country in the year 2001-02. However, recent

imports from china industries cheaper verities of biscuit, needs to be examined with cautions,

especially in the context of the price as the low margin based domestic industry, which is

operating at 60 % of the total installed capital. Exports of biscuits from India has been to the

extent of 5.5% of the total production. Export are expected to grow only in the year 2006-07 and

beyond.

Biscuit is a hygienically packaged nutritious snack food available at very competitive prices,

volumes and different tastes. According to the NCAER(National Council Of Applied Economic

Research) 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.

Biscuit can he broadly categorized into the following segments:

(Based on productions of 2007-08)

Glucose

Marie

Cream

Crackers

INDUSTRY PROFILE

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.

As people started to explore the globe, biscuits became the ideal travelling food since they stayed

fresh for long periods. The seafaring age, thus, witnessed the boom of biscuits when these were

sealed in airtight containers to last for months at a time. Hard track biscuits (earliest version of

the biscotti and present-day crackers) were part of the staple diet of English and American sailors

for many centuries. In fact, the countries which led this seafaring charge, such as those in

Western Europe, are the ones where biscuits are most popular even today. Biscotti is said to have

been a favourite of Christopher Columbus who discovered America!

Making good biscuits is quite an art, and history bears testimony to that. During the 17th and

18th Centuries in Europe, baking was a carefully controlled profession, managed through a series

of 'guilds' or professional associations. To become a baker, one had to complete years of

apprenticeship - working through the ranks of apprentice, journeyman, and finally master baker.

Not only this, the amount and quality of biscuits baked were also carefully monitored.

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 "jumbles", "plunkets" and "cry babies

As technology improved during the Industrial Revolution in the 19th century, the price of sugar

and flour dropped. Chemical leavening agents, such as baking soda, became available and a

profusion of cookie recipes occurred. This led to the development of manufactured cookies.

Interestingly, as time has passed and despite more varieties becoming available, the essential

ingredients of biscuits haven't changed - like 'soft' wheat flour (which contains less protein than

the flour used to bake bread) sugar, and fats, such as butter and oil. Today, though they are

known by different names the world over, people agree on one thing - nothing beats the biscuit!

Some interesting facts on the origin of other forms of biscuits:

The recipe for oval shaped cookies (that are also known as boudoir biscuits, sponge biscuits,

sponge fingers, Naples biscuits and Savoy biscuits) has changed little in 900 years and dates

back to the house of Savoy in the 11th century France. Peter the Great of Russia seems to have

enjoyed an oval-shaped cookie called "lady fingers" when visiting Louis XV of France.

The macaroon - a small round cookie with crisp crust and a soft interior - seems to have originated in an Italian monastery in 1892 during the French Revolution.

SPRING-UHR-LEE, have been traditional Christmas cookies in Austria and Bavaria for

centuries. They are made from a simple egg, flour and sugar dough and are usually rectangular in

shape. These cookies are made with a leavening agent called ammonium carbonate and baking

ammonia.

The inspiration for fortune cookies dates back to the 15th and 17th Centuries, when Chinese

soldiers slipped rice paper messages into moon cakes to help co- ordinate their defence against

Mongolian invaders.

NutriChoice SugarOut

Sounds like yesterday when people commented that healthy foods meant "compromising on the

taste." NutriChoice SugarOut is the most novel product range to have been introduced in the

market. The product is not just sweet but tastes great, and yet contains no added sugar.

Central Excise Duty on Biscuits

In the Union Budget 2007-08, the Finance Minister who had imposed a 100% increase in the rate

of Excise Duty on biscuit from 8% as a part of the rationalisation of CENVAT and introduction

of single rate of Duty did not offer any concesison on the Budget for 2001-02. On the other hand

the 50% exemption to small packs was withdrawn. During these years and in 2006, the

Federation submitted strong representations to the Union Finance

Minister seeking relief in the Excise Duty on biscuits, giving biscuit special treatment that it deserves on account of the exceptional nature and sensitivity to price increase. The Federation submitted its Pre- Budget Memorandum for 2009 demanding at least 50% Excise Relief.

It is a matter of great satisfaction that the Govt. has, after 3 years, acceded to our demand and

grated reduction in Excise Duty (from 16% to 18%) in the Union Budget for 2007-2008.

COMPANY PROFILE

A long time ago, when the British ruled India, a small factory was set up in the suburbs of of

Mumbai city, to manufacture sweets and toffees. The year was 1929 and the market was

dominated by famous international brands that were imported freely. Despite the odds and

unequal competition, this company called Parle Products, survived and succeeded, by adhering

to high quality and improvising from time to time.

A decade later, in 1959, Parle Products began manufacturing biscuits, in addition to sweets and

toffees. Having already established a reputation for quality, the Parle brand name grew in

strength with this diversification. Parle Glucose and Parle Monaco were the first brands of

biscuits to be introduced, which later went on to become leading names for great taste and

quality.

How Parle fought to make biscuits affordable to all. Biscuits were very much a luxury food in India, when Parle began production in 1959. Apart from Glucose and Monaco biscuits, Parle did offer a wide variety of brands.

However, during the Second World War, all domestic biscuit production was diverted to assist

the Indian soldiers in India and the Far East. Apart from this, the shortage of wheat in those days,

made Parle decide to concentrate on the more popular brands, so that people could enjoy the

price benefits.

Thankfully today, there's no dearth of ingredients and the demand for more premium brands is

on the rise. That's why, we now have a wide range of biscuits and mouthwatering confectionaries

to offer.

The strength of the Parle Brand

Over the years, Parle has grown to become a multi-million US Dollar company. Many of the

Parle products - biscuits or confectionaries, are market leaders in their category and have won

acclaim at the Monde Selection, since 1971.

Today, Parle enjoys a 40% share of the total biscuit market and a 15% share of the total

confectionary market, in India. The Parle Biscuit brands, such as, Parle-G, Monaco and

Krackjack and confectionery brands, such as, Melody, Poppins, Mangobite and Kismi, enjoy a

strong imagery and appeal amongst consumers.

Be it a big city or a remote village of India, the Parle name symbolizes quality, health and great

taste! And yet, we know that this reputation has been built, by constantly innovating and catering

to new tastes. This can be seen by the success of new brands, such as, Hide & Seek, or the single

twist wrapping of Mango bite.

In this way, by concentrating on consumer tastes and preferences and emphasizing Research & Development, the Parle brand grows from strength to strength. The Quality Commitment

Parle Products has one factory at Mumbai that manufactures biscuits & confectioneries while

another factory at Bahadurgarh, in Haryana manufactures biscuits. Apart from this, Parle has

manufacturing facilities at Neemrana, in Rajasthan and at Bangalore in Karnataka. The factories

at Bahadurgarh and Neemrana are the largest such manufacturing facilites in India. Parle

Products also has 14 manufacturing units for biscuits & 5 manufacturing units for

confectioneries, on contract.

All these factories are located at strategic locations, so as to ensure a constant output & easy

distribution. Each factory has state-of-the-art machinery with automatic printing & packaging

facilities.

All Parle products are manufactured under the most hygienic conditions. Great care is exercised

in the selection & quality control of raw materials, packaging materials & rigid quality standards

are ensured at every stage of the manufacturing process.

The Marketing Strength

The extensive distribution network, built over the years, is a major strength for Parle Products.

Parle biscuits & sweets are available to consumers, even in the most remote places and in the

smallest of villages with a population of just 500.

Parle has nearly 1,500 wholesalers, catering to 4,25,000 retail outlets directly or indirectly. A

two hundred strong dedicated field force services these wholesalers & retailers. Additionally,

there are 31 depots and C&F agents supplying goods to the wide distribution network.

The Parle marketing philosophy emphasizes catering to the masses. We constantly endeavour at

designing products that provide nutrition & fun to the common man. Most Parle offerings are in

the low & mid-range price segments. This is based on our cultivated understanding of the Indian

consumer psyche. The value-for-money positioning helps generate large sales volumes for the

products.

However, Parle Products also manufactures a variety of premium products for the up- market,

urban consumers. And in this way, caters a range of products to a variety of consumers.

The Customer Confidence

The Parle name conjures up fond memories across the length and breadth of the country. After

all, since 1959, the people of India have been growing up on Parle biscuits & sweets.

Today, the Parle brands have found their way into the hearts and homes of people all over India

& abroad. Parle Biscuits and confectioneries, continue to spread happiness & joy among people

of all ages.

The consumer is the focus of all activities at Parle. Maximizing value to consumers and forging enduring customer relationships are the core endeavours at Parle

Awards - Monde Selection Year Products Rank 1959 (Brussels) Cheeslings Monaco Gold Gold 1962 (Geneva) Gluco Silver 1973 (Paris)

Monaco

Gluco

Cheeslings

Gold

Silver

Silver

1974 (Bruxelles)

Cheeslings

Monaco

Gluco

Silver

Gold

Silver

1975 (Amsterdam)

Cheeslings

Monaco

Gluco

Monaco

Gold

Gold

Silver

Trophy Of The International High Quality

1976 (Britain-London)

Monaco

Cheeslings

Gluco

Krackjack

Gold

Gold

Silver

Silver

1977 (Luxembourg)

Monaco

Cheeslings

Krackjack

Gluco

Gold

Gold

Gold

Silver

1978 (Geneva)

Gluco

Monaco

Cheeslings

Krackjack

Gold Gold Gold Gold

1979 (Paris) Krackjack Gold

The major products offered by Parle-G industries are the following:

1.Brand Name: GoodDay and Marrie from Parle Gare stable and are the most established brand in

biscuit segment being equated for biscuits for long time. Now the brand has taken a dent though

among the present generation with competitors coming up with more powerful advertising

campaigns and offering more variety.

2.Styling & Packaging: Parle Gofferings have the innovative designs and packaging as compared to

what is offered by the competitors. As it's a variety seeking product the styling and packaging

helps in getting more customers.

3.Quality: Parle Gname is associated with quality. The offerings from Parle Gare of best quality when

it comes to taste and hygiene. Under it's mission statement "eat healthy think better"

Product mix Parle-G

There are always some kids who seem smarter than the rest. Ever wonder how they got to be that

way? If you had to think real hard for the answer, then probably you've never eaten Parle-G.

Parle-G is the new generation's official power supply. Providing kids with the vital vitamins and

minerals necessary for all round mental and physical development.

Apart from being the world's largest selling biscuit, Parle - G is the winner of 8 Gold and 11

Silver awards at the Monde Selection Awards – the global standard for quality in Food category.

Parle-G Magix

What is the power of taste? Can it get government officers to get your papers through faster?

Probably! Can it help you make friends and influence people? It's worth a shot! Can it land you a

lead role in a blockbuster movie, even if you can't act?

Fact is, people will do anything for a taste of Parle-G Magix. But the real question is, will you be

willing to share your packet of Parle-G Magix to find out exactly how much power you can

exert? With two delicious tastes - Choco & Cashew, Parle-G Magix has put great power in your

hands. Go ahead & wield them wisely.

Parle-G Milk Shakti

What have you heard about Parle-G Milk Shakti? Think hard. Ok, now eat a biscuit. Got it? Yes,

you're absolutely right. It aids mental stimulation. And energises the body too. Now try and

memorise this - it is the only milk biscuit with the goodness of honey.Should be unforgettable,

once you bite into one of these power-packed biscuits.

Krackjack A little sweet - A little salty… That's what makes Krackjack very, very delicious! This delightful biscuit

is acclaimed in India and across the world for its controversial

sweet and salty taste. Krackjack has won 11 Gold, 3 Silver and 1 Bronze award at the 'Monde

Selection'. You can enjoy Krackjack any time plain or with a host of beverages like tea, coffee or

milkshakes.

Monaco Zabardast Zeera

To add some spice to life, have the exciting variant of Monaco - The Zabardast Zeera Flavour.

The same light salted biscuits that lift your spirits now comes delicately seasoned with Zeera.

Relish this unique taste at all times of the day.

Marie Choice

More and more people are now discovering the pleasures of a cup of hot steaming tea. Or so it

seems. In reality they are actually using (misusing) tea as a ready excuse to indulge in another

packet of Parle Marie Choice. Whatever the reason, Parle Marie Choice has fast become a

preferred teatime accompaniment. Find out for yourself over a cup of tea. After all , chai toh hai

bahana.

Hide & Seek

Let your taste buds indulge in the sinful pleasure of a delightful game. Seek out the chocolate

chips that aren't really hidden. And relish a delectable experience called Hide-&-seek - tasty itna,

ki dil aajayee.

As you crunch into it, these chips melt in your mouth. Try as you might, you just can't hide from the sheer delight of munching a mouthful Fun Centre

There might have been times when you were unsatisfied with the amount of cream in the middle

of cream biscuits. With Parle Fun Centre, you'll have no such problems. A delicious biscuit filled

with cream till the edges, ensuring that it has the highest cream content in its category. Available

in a variety of mouthwatering, lip-smacking flavours like chocolate, butterscotch, strawberry and

milk cream, these irresistible cream biscuits whet your appetite for more, and also make for a

perfect dessert.

NutriChoice SugarOut

This is because NutriChoice SugarOut is sweetened with "Sucralose," derived from sugar, which

provides the same sweetness as any other biscuit, without the added calories of sugar.

This range is available in 3 delicious variants namely Litetime, Chocolate cream, and Orange

cream, targeted towards all health sensitive people. It is also relevant for consumers with sugar

related ailments.

We are sure that you will be pleasantly delighted with its great taste and equally surprised to know that it has no added sugar.

Don't be taken for a ride when you read "Sugar Free" label on many biscuit packs marketed in

India or abroad. Even with 100% no-added sugar, wheat-cereals in biscuits have their own

natural sugar content. Parle Ghas chosen to represent these biscuits with "No Added Sugar"

claim, as there is no added sugar in the processing of NutriChoice SugarOut.

Nutri Choice Digestive Biscuit

Nothing can be more difficult than making small efforts in our daily life towards healthy and

active living. 24/7 we are engrossed in our busy schedules; skipping meals, missing walks, along

with inadequate sleep and frequently eating-out, all take a heavy toll on our health.

At least with the new and improved NutriChoice Digestive Biscuit, we have one less thing to

worry about. Made with 50% whole-wheat and packed with added fibre (10% of our daily

dietary needs), these delightfully tasty biscuits are amongst your healthiest bites of the day.

In your next visit to a shop just look out for its Golden-green international carton pack. Try one and you'll know that you've made one smart choice – NutriChoiceTreat Fruit Rollz So go on and treat yourself to the lip-smacking snack! New Parle-G Milk Bikis

Milk Bikis, the favorite growth partner of Kids, now brings greater value and delight to all with

its new product and pack design. Recently re-launched in its existing Southern & Eastern

markets, and extended across India, the new Milk Bikis is all set to add excitement and appeal to

‘nutritious’ food. Whoever said that ‘good food’ needs to look ‘dull and boring’, will just have to

take a look at Milk Bikis.

With a unique and attractive honeycomb design and an enhanced product experience, the new

biscuit prompts the ‘Kid’s will love it’ reaction amongst mothers. The milk goodness in the

recipe is now enhanced with SMART

NUTRIENTS – 4 vital vitamins, iron and iodine, proven to aid mental and physical development

in growing kids. The premium packaging, besides appealing to kids, also ensures that the biscuits

remain fresh and crisp.

So, whether its breakfast time or snack time at school, rest assured that kids will look forward to

munching these crunchy, milky biscuits which even helps in their development. And yes, adults

won’t be far behind in reaching out for a pack!

Parle-G 50-50 Pepper Chakkar

The launch of the latest 50-50 variant left everybody guessing "What it is?" From TV ads, radio,

outdoor and in-store display materials to events, a website and SMS and email blasts, traditional

and new media were blended synergistically to create excitement and curiosity about the unique

taste of the biscuit. The tangy and distinctive pepper flavoured biscuit, that's thin and crispy and

more like a snack, caught the imagination of a younger audience craving something to nibble on.

The 50-50 Pepper Chakkar launch is truly a case of leveraging the marketing mix to best

advantage.

Parle-G profits up 125 % in Q2; growth momentum continues

Mumbai, October 23rd, 2007: Parle-G Industries Ltd. (PARLE G ), one of India’s leading food

Companies, reported sales of Rs. 6,588 MM for the quarter ended 30th September 2008,

reflecting 20% growth over the corresponding quarter last year. Net Profit for the quarter at Rs.

485 MM was more than double for the corresponding quarter last year of Rs 212 MM.

For the half year ended 30th September 07, revenue grew 19.6% to Rs. 12,356 MM, while net profit at Rs 846 MM was 64.6% higher than last year. Commenting on the performance, Ms. Vinita Bali, Managing Director, said,

“We continue to build on the growth momentum of last year. We have added 340 basis points to

our margin through higher price realization as well as innovation. The increase in profit has been

achieved despite the continuing and unprecedented increase in prices of key commodities like

flour, oils & dairy products.”

During the quarter, the Company launched ‘Treat Choco Gelo’, an extension of the Treat franchise with ‘double masti’ of chocolate & caramel and also

introduced a range of premium indulgence cookies under ‘Pure Magic’ brand. Investment in

Advertising and Sales Promotion has been increased by 50% to fuel the innovation led growth.

MEASURES UNDERTAKEN BY GOVERNMENT

The Food Processing Industry have been experiencing the adverse affect of multiplicity of

various Acts/ Rules and Regulations for food standards under the Prevention of Food

Adulteration Act Standards of Weights & Measures Act, Food Products Order, the Meat

Products Order, the Bureau of Indian Standards & MMPO (Milk & Milk Product Order), etc.

affected the Food & Food Processing Sectors. They need to be modernized & converged.

As a consequence of various representations of industry, the Govt. of India has decided to set up

a Group of Ministers (GOM) to propose legislation and other changes for preparing a Modem

Integrated Food Law and related regulations. The Ministry of State for Food Processing

Industries is the Nodal Ministry to coordinate the Parle G l.

Our federation submitted its recommendations and suggested to placed before the

Group of Ministers, covering the broad frame work required for the food legislation as

well as specific issues such as:

The main objectives of the new Integrated Food Laws & its structure

Methodology of development of Standards

Provisions of Labelling

Acceptance of a basic list of additives

Matters relating to GMP(Good Manufacturing Practice), GHP(Gud Health Plan)

Issues related to Codex

Procedure for sampling& launching of Prosecutin

Grading of violations according to the nature of discrepancy.

Recent Changes / Amendments

Prevention of Food Adulteration Rules The Ministry of Health & Family Welfare, Govt. of India

vide its Notification No. GSR 908 (E) Dt. 20.12.2008 has provided for printing of statutory

symbol on all products containing vegetarian ingredients. The notification came into effect from

20 June 2008. As members may be aware the Govt. has earlier amended PFA Rules vide

notification No. 245(E) Dt.4.4.2001 provided for statutory printing of the symbols of food

packages containing non vegetarian ingredients. This notification has already come into effect

from 4 October 2008.

Our Federation along with apex organizations such as CII(Confederation Of Indian Industry) &

CIFTI (Confederation Of Indian Food Trade & Industry)have represented to Hon'ble Union

Minister for Health and Family Welfare seeking extension of a minimum period of 6 months for

implementation of the notification, particularly on account of hardships in printing vegetarian

symbol in advertisements. A delegation from the industry met the Secretary, Ministry of Health

and Family Welfare and apprised him of the hardships faced by industry. Further follow up is in

hand.

Prevention of Food Adulteration Act / Rules Members reported various instances where the PFA authorities in the States are adopting penal action, even in cases of very minor offences / errors under the PFA

Rules. FBMI (Federation Of Biscuit Manufacturer Of India) suggested that such minor errors etc

should be compounded, avoiding prosecution, harassment and resultant losses to biscuit units.

This issue has also been referred to CII (Confederation Of Indian Industry) & CIFTI

(Confederation Of Indian Food Trade & Industry) for further follow up.

Introduction of HACCP/GMP/GHP

The Govt. of India (Ministry of Health), has formulated proposals to introduce the concepts of

Hazard Analysis Control Convention Procedures (HACCP), Good Manufacturing Practices

(GMP) and Good Hygienic Practices (GHP), as a step towards eventual adoption in the various

states in accordance with the International Codex Alumnus, in the context of trade terms and

regulatory, measures under the WTO regime.

After discussions with FBMI and other organizations, the Dept of Health constituted Sectoral

Groups on various categories of food processing industries. The Sectoral Group on Bakery

Products consisted of FBMI ((Hazard Analysis Critical Control Point) Federation Of Biscuit

Manufacturer Of India), as Convener and FBMI and SIB as members. After detailed

deliberations, the Federation submitted our comments and suggestions, highlighting the

hardships that the biscuit units would face in the event of statutory enforcement of

HACCP/GMP/GHP.

The Federation suggested that the concepts of HACCP etc should be made voluntary in the first

two/three years, keeping in view the ground realities in the bakery sector and due to the fact that

the implementation of HACCP/GMP/GHP may be beyond he financial and technical

capabilqities of majority of the biscuit manufacturers and compulsory introduction of these

regulations would adversely impact the via Parle G ity and may lead to closure of a large number

of bakeries in the country. FBMI, after detailed deliberations by the Executive Committee,

suggested to the Govt. of India that, in the first instance projects for imparting training to the

Managers/Executives and workforce in the bakery industries should be organized so as to create

awareness

and knowledge on these complex regulatory aspects and educate the personnel in the industry on various aspects of HACCP etc. Unified Food Laws – Need for

As members are aware, the food processing industries, including Biscuit / Bakery segment, are

subjected to and administered by a large number of statues i.e. PFA Act / Rules, Weights &

Measures Act, Packaged Commodities Rules, MMPO(Milk & Milk Product Orders) under

Essential Commodities’ Act / Rules, Agmark, BIS etc. There are much multiplicity of

implementing / enforcing Agencies / Departments for watch one of these Acts and Rules, both at

Central and State levels. Unfortunately, many a time there are instances of overlapping and even

contradictions between such Agencies / Departments. PFA Act / Rules are recipe based, and

focus on prosecution / penal action, even for minor / technical errors etc. which are also different

in the States.

Similarly, in the Standards of Weight & Measures Act and PC Rules, there have been plethoras

of amendment, and proposals for more restrictions on the food processing industries including

Biscuit and this has resulted in unavoidable hindrances in the development and growth of the

industries.

It is in this context that our Federation in close coordination with CIFTI, CII, FICCI, PHDCCI

urged he Government to evolve a single Integrated Food Law, encompassing the existing

legislation’s mentioned above, with main focus on development and promotion of the Food

Processing, Agro Based industries in the country, paving way for creation of large employment

generation, consumption of varied types of safe food products of good quality, at reasonable

prices benefiting consumers particularly those in the lower and middle segments of the society.

Exports and better capacity utilization also need to be encouraged in the proposed Integrated law,

which would also result in higher productivity and better revenue for the Central and State

Governments.

As a result of such concerted efforts and presentations by organizations of industry, including AIMBA the Government constituted the Justice Venkatachalam Committee

to review the entire gamut of the existing Food Laws and to recommend the ways ad means and

basis for unifying these Acts / Rules and regulations into an Integrated Food Law (Act). After

due consideration of all aspects and by inviting suggestions from Govt., Industry and Commerce

as well as consumers and other important sections of the community at large, the Committee

submitted its report containing detailed suggestions / recommendations on the imperative need

for integrating the existing multiple food laws.

Accordingly, the Govt. formed a Group of Ministers with the Ministry of Food Processing

Industries as the nodal point and this comprehensive exercise has resulted in the Draft Food Parle

G l 2002 presented to the Group of Ministers. The said Draft Food Parle G l 2002 has been

formulated to “provide for the production, manufacture, processing and sale of safe and suitable

food systematic and scientific development of food industry, introducing new technologies,

imparting new inputs of market dynamics, and to create an enabling environment for innovation

and value additions, ensuring high degree of objectivity and transparency and to provide for the

establishment of a Food Development an Regulatory Authority of India an the Council for Food

Standards and for matters connected therewith or incidental thereto.

MARKETING STRATEGY FOR PARLE G • Cost leadership:

It is a cost leader in its industry except in cheese and glucose biscuits where it lags behind Parle

respectively. The company has undertaken modernization program in order to improve

productivity. To focus resources, rationalization of brands and packs has been undertaken and

the existing brands have been clustered into more cost efficient portfolio through a process of

brand concentration.

• Economies of scale:

Parle G is adding capacity at regular intervals depending upon the economic environment It has

the advantage of being able to source raw materials and even packaging at cheap rates because of

large scale of operations.

FIVE FORCE MODEL FOR PARLE G 33 COMPETITOR’S FORCE (Major MNCs likely to diversify and get into related business of Parle G SUPPLIER’S FORCE (Very large number less of bargaining power

PARLE GPARLEBAKEMAN’SREGIONAL

BUYER’S FORCES

(more quality suppliers,so conscious and pricesensitive

SUBSTITUTE’S FORCES

Household snacksBakery biscuitsFast food

PARLE G SUPPLY CHAIN

Supply chain Describes a longer channel stretching from Raw materials to components to final Products that are carried to final Buyers.

Parle G Supply Chain include Authorized wholesaler, Superstockists, RPDs, UPDs and

Retailers. The Raw Materials are converted into finished goods in the Production Units or

Factories. From factories the finished goods are then sent to the Regional Depots or the Mother

Depots. From here the stock reaches the Warehouse for distribution to the Authorized

Wholesaler. From Warehouse or Depots the Stock either reaches the Superstockists or the

Authorized Wholesalers. From Superstockists the stock goes to either UPDs (Universal Printer

Driver) or RPDs (Radiation Protection dosimetry) from where it finally reaches to the markets of

Rural India. The Authorized Wholesaler buy goods from Company and from them the Stock

goes to the Retailers. Retailers sell Company Products to the End Consumers.

The Sale of the Stock from Depots to Authorized Wholesaler constitutes Primary Sale while the

Sale of the Stock from Authorized Wholesaler to Wholesaler constitute Secondary Sale.

Different rural markets have different set of Superstockists (SS) which further have RPD’s

(Rural preferred Dealers) and UPD’s (Urban preferred Dealers) under them. These UPD’s are the

dealers of very small regions only which are considered rural only and are not completely urban.

Sales Promotion

Sales promotion, a key ingredient in marketing campaigns, consists of a diverse collection of incentive

tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or

services by consumers or the trade."

In marketing, sales promotion is one of the four aspects of promotion. (The other three parts of

the promotional mix are advertising, personal selling, and publicity/public relations.) Sales

promotions are non-personal promotional efforts that are designed to have an immediate impact

on sales. Sales promotion is media and non-media marketing communications employed for a

pre-determined, limited time to increase consumer demand, stimulate market demand or improve

product availability. Examples include:

· coupons · discounts and sales · contests · point of purchase displays · rebates · free samples (in the case of food items) · gifts and incentive items

free travel, such as free flights Sales promotions can be directed at either the customer, sales

staff, or distribution channel members (such as retailers). Sales promotions targeted at the

consumer are called consumer sales promotions. Sales promotions targeted at retailers and

wholesale are called trade sales

promotions. Purpose of sales promotion.

Sales-promotion tools vary in their specific objectives. A free sample stimulates consumer trial,

whereas a free management-advisory service aims at cementing a long-term relationship with a

retailer.

Sellers use incentive type promotions is to attract new triers, to reward loyal customers, and to

increase the repurchase rates of occasional users. Sales promotions often attract brand switchers,

who are primarily looking for low price, good value, or premi-urns. Sales promotions are

unlikely to turn them into loyal users. Sales promotions used in markets of high brand similarity

produce a high sales response in the short run but tittle permanent gain in market share. In

markets of high brand dissimilarity, sales promotions can alter market shares permanently.

MAJOR CONSUMER PROMOTIONAL TOOLS Samples: Offer of a free amount of a product or service delivered door to door, sent in the mail, picked up in a store, attached to another product, or featured in an advertising offer.

Coupons: Certificates entitling the bearer to a stated saving on the purchase of a specific product: mailed, enclosed in other products or attached to them, or inserted in magazine and newspaper ads.

Cash Refund Offers (rebates): Provide a price reduction after purchase rather than at the retail shop: consumer sends a specified "proof of purchase" to the manufacturer who "refunds* part of the purchase price by mail.

To promote products to consumer, company devises some scheme like discount on

MRP, giving freebies with product etc.

How Consumer promotional offer products differ from normal product without offer ?

PROMOTION IN RURAL MARKET MERA RPD MAHAN CONTEST

Mera RPD (Radiation Protection Dosimetry) Mahan contest was a dealer incentive contest which

was designed for the dealers of the Rural market. This contest was designed to motivate the

RPDs (Radiation Protection Dosimetry) and UPDs (Urban preferred Dealers) to reach their Sales

target of 35,000 and 50,000 respectively. This contest was held in the month of May and June.

The details of this contest are as follows: Period May- Jun'06 Scope RPDs (Radiation Protection Dosimetry) in all SURE Territories Criteria

Sales target achievement for the incentive period

Targets for the period to be set by the SO/ ASM in

consultation with the RSM Minimum swing of 40% in

May and June'06 MA sales over Jan-Mar'06 MA sales

To qualify the RPD must have minimum current sales

of Rs.30000 PM or the Target sales should be a

minimum of Rs.30000 PM.

Mechanics 1 Top RPD to be selected as the "Mera RPD (Radiation Protection Dosimetry) Mahaan" per RPD PSM PJP. This RPD to get a gift article worth Rs. 3000/- (Nokia MoParle G e Phone Proposed All other RPDs to get a gift article worth Rs. 500/- or cash if preferred

The product is marketed under some scheme.

The packaging is different from normal product.

The freebies procurement & logistics planning is additional activity.

The production centers may be different from regular production centers.

The distribution strategy may be different from regular one.

Parle G Industries Ltd. Planned to launch six promotional offers in the month of May and June 2008.

Complexities involved were promotional offers limited to some region of our country and rest of

country was on normal product.The promotional offers were limited to Uttar Pradesh and

Rajasthan.

Objectives :- To deliver right SKU (Stock Keeping Unit) & Gift item to right place in right time. To achieve internal customer satisfaction level to 95%. And to increase the consumer base for newly launched product. Marketing Department decides to run promotional offers on brands with following objectives. To penetrate market with greater share of business. To leverage Parle-G brand by having association with some other known brand. To counterattack competitor’s strategy. The consumer promotional offers are based on the principle of elasticity of demand. Following consumer promotional offers were conceptualized for May and June 2006

WEAKNESSES • The Company takes a lot of time in handling the UCA (Supply Chain Company) claims of the authorized wholesalers; this !eads to demotivation • Warehousing norms are not followed, which accounts for high breakage •

The semi-sweet category accounts for the maximum turnover in the mass market- the Tiger

Anytime being a member of this category is perceived as a tow quality product; this may

liquidate Parle G 's brand equity in the mass market

•

Parle G has positioned it's Tiger range on health and taste, but my findings show that health

consciousness in the mass market is low, which means that the brand is under-positioned, since

the market doesn't consider "health1 as an important benefit in biscuits

• Parle G 's strength is in mid, premium mid super-premium category; this market is approaching a saturation point • Parle G 's mass market is not segmented properly; Parle G cannot afford to go all out

in the mass market, the best strategy would be to concentrate on these segments of the

mass market, which will account for volume sales and require minimum investment

• Performance-based incentive to motivate the sates staff is not existing in the Company • Yearly incentives don't motivate the dealers of mass market brands OPPORTUNITIES • Mass market is growing with established preference for biscuits • Growing middle class in India can provide more opportunities for Parle G 's pillar brands • Credit given to dealers will help Parle G in expanding the width of reach, by which the company will have a volume advantage

• Taste plays an important role in mass market which can take care of price sensitivity to some extent • There is low differentiation in the mass market brands • There is a fairly good market for a high count salty cracker variety and a cream cracker variety in the mass market THREATS • De-reservation of the biscuit industry may attract foreign players who initially will try to attack the premium segment, which is already established for Parle G •

A characteristic feature of premium market consumer is that this segment is not brand loyal;

therefore there is a chance of the consumers to shift to other brands in the near/distant future

• Too much concentration in the mass market may affect the companies market in this established segment • Mass-market venture may account for this cannibalization • A large number of competitors each having respective bold in different markets of the company's pillar brands will account for high contribution/orrir