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Big biscuit makers nurture nutritious cookies

As consumers bite into biscuits, small firms are biting into large manufacturers, aided by cut-price strategies. Is the cookie crumbling for big boys like ITC and Britannia?, asks Ruchi Hajela.

business Updated: Sep 09, 2008 22:06 IST
Ruchi Hajela

As consumers bite into biscuits, small firms are biting into large manufacturers, aided by cut-price strategies. Is the cookie crumbling for big boys like ITC and Britannia? Not quite, because they are fortifying their defences with high-profit-margin biscuits aimed to please health-conscious customers and brand-conscious young urban professionals.

Health biscuits boast of high fibre, low fat and sugar and are positioned as a substitute for confectionary products such as pizzas and burgers. That’s cheaper than the high-calorie snack, but yet considered filling and nutritious.

Wheat, vegetable oil, milk and packaging costs have gone up in the price-sensitive biscuit industry, said Vanmala Nagwekar, analyst at India Infoline. But that may not hit profits, if the revenues are pushed up by smart innovations.

“Our input costs have risen by about 12 per cent over the last few quarters,” admits Neeraj Chandra, vice-president, sales, marketing and innovation, Britannia industries Ltd said.

More known for its mid-market snacks like Marie biscuits and Tiger glucose, Britannia recently introduced a new range of high-value, high-fibre extension of its Nutri Choice brand. The new biscuit constitutes five grains — oat, corn, ragi, rice, wheat — and adds a dash of honey. The pretty pack of 12 biscuits costs Rs 40, more than twice the middle-of-the-road cookies.

ITC Foods, a late entrant into the game with its Sunfeast brand, had launched a similar multigrain biscuit with six grains priced at Rs 10 pack around two years ago. Ravi Navare, chief executive, ITC Foods, said, “The health biscuit category is in a nascent stage but is finding a way with health conscious consumers.”

Health biscuits account for only about Rs 200 crore of the Rs 8,000-crore biscuit market in India, in which the unorganised small units account for about 40 per cent. Britannia leads the biscuit market with a 35 per cent share.

Local shopkeepers are already selling international brands such as US based Nature Valley and McVites.