Parle Products' Senior Category Head, Mayank Shah said that 2020 was a year of remarkable growth for the biscuit firm, which it had not observed in the last 30-40 years.
The competition between Parle-Britannia is decades old. The duo has constantly tried to maintain one-upmanship against each other until FY13, when Britannia Industries suddenly swept past Parle Products on the back of its premiumisation strategy and strong distribution network. Although both the biscuit firms had an effective run through the COVID-19 lockdown in FY21, it was a benefit to Parle Products. As per a recent report by Edelweiss Research, Parle has appreciably narrowed the market share gap and is now in close competition with Britannia.
The main vastness behind Parle's growth comes from the back of its leading brand, Parle-G. Previous year has seen a considerable amount of down-trading which benefitted Parle-G because of its low-cost pricing of Rs 2. Actually, Parle-G was the sought-after brand of numerous Government agencies and NGOs which bought in bulk to distribute to migrant workers. Due to its pocket-friendly pricing, the preference for trusted brands during the pandemic also gave Parle-G a distinct advantage. The Edelweiss report says that Parle
gained significant market share from smaller players in FY21, which supported to narrow the market share gap with Britannia industries. In FY18, Britannia had a 30.8 per cent share and Parle was neck-to-neck at 29.1 per cent. Britannia widened this gap by 5 per cent in FY20.
The Edelweiss report affirms "The pandemic compelled many migrants to return to rural areas last year and due to their propensity to consume trusted but value-end products, this would have benefitted Parle against smaller players. Parle is still way stronger in rural areas of many parts of North India versus Britannia,". Moreover, Britannia had emphasized its Stock Keeping Units (SKUs) last year and had attentive more on its value-added brands such as Marie, Milk Bikis and Good Day. Varun Berry, Britannia MD, had stated about an 80:20 strategy, in which the firm would focus on 20 per cent of its portfolio, which churned 80 per cent of its revenue.
Britannia Industries has been constantly seeking to maintain its winning run in the Rs 40,000 crore Indian biscuit industry. Not only has it developed its rural distribution which has traditionally been a iron grip of Parle, Britannia has been particularly targeting North India, where Parle is strong. "Britannia has launched Milk Bikis atta biscuits with tagline of 'Doodh Roti ki Shakti' in Hindi, aiming to appeal to the Hindibelt and northern rural areas," points out the Edelweiss Report.
Britannia presently has 26 per cent share in the milk biscuit category, but it is resolute to increase its market share in the milk plus glucose category where it presently holds 4 per cent share only.
The Indian biscuit market size is appraised at Rs 40,000 crore in 2020, indicating almost 5 per cent of the global market. The Indian market is estimated to post Compound annual growth rate (CAGR) of 9 per cent to Rs 62,000 crore till 2025, according to a Technopak report. This growth will raise India's share in the global market to approximately 6 per cent by 2025.
Britannia industries are ascertained and working towards an hostile growth in the past few years and if Parle would maintain the current growth momentum it would certainly be an attention-grabbing piece of evidence.
