Business

Biscuit supply remains short of demand and trends show sector likely to grow in double digits even after lockdown

For the father of four-year-old Sakshi Sharma, it was compulsory to stock up on biscuits as it is her child’s comfort food. Just before the lockdown, Robin Sharma bought his monthly staple biscuits, but the lockdown upset his plans. With the aim of stocking more before the grocers and the mall closed, Sharma ran into one of the malls, but was met with bare shelves. Although the mall soon replaced the packets of biscuits with cartons, they also disappeared. Sharma then decided to buy them in cartons, something he had never done before. He is now sitting at home with chocolate biscuits, cream biscuits, which will last him another two months.

In addition to families who have been forced to stay home due to COVID-19 induced lockdown, biscuits have also been an easy way for migrants to access the product in their long struggle to reach home in the absence of public transport is.

That biscuit is sold as a packaged product, also served to benefit the category as concerns over handling and hygiene are eliminated.

It is perhaps due to these factors that unprecedented sales of Parle-G brand biscuits with its producer Parle Products were recorded since the government announced the lockdown.

“The growth was unprecedented and as a result Parle was able to increase its market share from 4.5 to 5 percent during the lockdown,” said Mayank Shah, a senior company executive. PTI.

Company officials said Parle Products achieved growth as it was preparing a strategy to boost sales during the coronovirus outbreak.

Parke Products Senior Category Head-Marketing BK Rao told First position The company began efforts to increase production after the first case was revealed. But it was not an easy task.

After the announcement of Janata curfew by the government on 22 March, we faced a lot of opposition from our scared channel partners. How can you go out Is corona (How shall we go, there is corona) He was constantly denied. We had to tell them that if the police force, health workers, grocers, chemists, petrol pumps were working, then we could. We inspired the partners and eventually got their support, ”said Rao.

Even after lockdown, the supply of biscuits remains below demand and trends and is likely to increase in double digits

Other challenges were – procurement of raw materials, bringing the workforce in order and maintaining social isolation. Rao said that the input material for production was to be sought from wholesalers, for which he had to request to open his units.

Transport was another obstacle but with incentives given to truck drivers, they were able to obtain a limited number of raw material-filled trucks and road-ready finished products.

Interpretation of the government order by the officials was another obstacle, Rao said, but later the central government notification on essential foods was a major relief, he said.

The challenge of getting the manpower to work with only 50 percent was also met and the company started production in earnest.

Rao said that Parle Products has 130 factories across the country and most of them are contract manufacturing units and this has also helped in meeting production and sales targets.

Hemant Malik, Divisional Chief Executive, Food Division of IITC Limited, also said that the company has seen an ‘unprecedented surge’ in demand for differentiated offerings in the biscuit segment, including Sunfeast Bounce, Mom Magic, Sunbeast Mary, Sunfeasted Veda Mary during the lockdown. Are included. Period.

He said that in the health and wellness segment, Sunfeast Veda Mary received a very encouraging response from consumers.

Malik said, “ITC entered into a number of new distribution delivery partners with various e-commerce platforms, as well as new-old home delivery ventures with the ability to serve last-mile.”

In addition, the company also engaged with consumers through its direct-to-consumer portal as well as ITC stores on wheels, which were completed in housing complexes in major metros.

Supply still does not meet demand

Although Parle facilitates the supply of biscuits, retailers complain that they are still able to purchase only 25 percent of their orders.

AN Hariya, proprietor of Hariya Super Market in Mulund West, said that the Parle-G brand has always remained its best-selling product despite the lockdown.

“But with the lockdown, delivery has been disrupted. We have to go to wholesalers and since we cannot rent trucks etc., we travel on our scooters or bikes. How many coaches can we bring in this way? Even if we can, the distributor has only 25 percent of the stock available, ”he said.

Wholesalers whose retailers buy their stock found that demand for biscuits had risen sharply during the first phase of the lockout. B2B wholesaler, Metro Cash & Carry, realized that as soon as the lockdown was announced, people started stacking large packs of biscuits for easy consumption. A spokesperson said the biscuit category was growing by 15 percent pre-COVID, but it exceeded 50 percent during the lockdown.

In the first ten days of the lockdown, it was found that it was running out of stock for most brands.

The all-time popular, glucose and health segment was a favorite in the biscuit category and saw high growth during lockdown. The B2B wholesaler said the mid-tier biscuit segment grew as consumption of the in-house family increased.

The fact that no outside food was available, and sweet It was out of bounds, an easy-to-find food biscuit, analysts say.

A spokesperson for Metro’s Cash & Carry said, “Our merchant customers were buying small packs of Rs 5 and Rs 10 biscuits. Complimentary customers were buying large packs of Rs 65 and above.”

The spokesperson said that one of the reasons for this is the good biscuits in India as it is the cheapest.

But like retailers, wholesalers also found it difficult to buy biscuits. “Initially, we had to face big problems because big companies had manufacturing challenges. There was a difference in demand versus supply. However, these issues have just been resolved and supply has stabilized, ”the spokesperson said.

Harsha Razdan, partner and head of consumer markets and internet business at KPMG in India, said, ‘In a price-sensitive market like India, small packets of biscuits have always worked well. A pack of 5 rupees is considered as a comfort food for travel and can even serve as a quick snack. In some cases, biscuits are considered a substitute against food. ”

Razdan said that the biscuit companies, which managed to have the right distribution channels to ensure availability and consumer reach, had an edge over other players.

Introducing new version of biscuits

Considering the rise in demand for biscuits and increase in demand, some firms like Punjab-based Bonn Industries which are in the premium range of biscuits are now considering coming up with a variant with glucose.

Amarinder Singh, director of the Bonn Group of Industries, said that demand and sales of biscuits were high because “biscuits not only fill the stomach but the glucose level in it gives you the energy needed to complete your work”.

“People have stocked their homes with inexpensive biscuits, which come in the range of Rs 5 and Rs 10. We plan to capitalize on the growing trend by introducing a new biscuit range, which protects the body’s immunity. Will help increase the time of coronavirus, “he said.

Biscuit range for the time being good

Grocers told First position Brand loyalty was not the main deciding factor during the COVID-19-inspired lockdown as customers were ready to purchase any biscuit available.

“Customers bought biscuits in bulk because they were worried that it would not be available. So, if their favorite brand was unavailable, they would settle for whatever was available, ”he said.

Traders and retailers said that the ready-to-cook category was not readily available in the early days of the lockout, so biscuits remained the major choice, traders and retailers said.

Biscuits as a category have been seeing traction since January, said Abhijeet Kundu, analyst at Antiquities Stock Broking.

He said the expectation was that it would be good during the lockdown as consumers could stock up. He said that being able to improve the market share of Parle-G biscuits, the government preferred it to feed migrants and daily wage earners.

Given the fact that biscuits are fairly inexpensive among groceries, Kundu believes that the trend will continue for some time with biscuits as well as for one category.

“People will refrain from eating out until the lockdown is smooth and development is normal. Britannia has seen a 24 percent increase in April-May. The pace is expected to continue, ”he said.

As lockdown eases, Kundu said that the increase in biscuits could decrease during Q2 or Q3 but it would still see double-digit growth in volume.

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