Unibic plans aggressive expansion with slew of new product launches

Bengaluru-based cookie maker plans 2nd plant

At a time when most of the large fast-moving consumer goods (FMCG) players are going slow on new product launches because of a demand slowdown, cookie maker Unibic has set an aggressive expansion plan.

A relatively smaller player — with a top line of around Rs 500 crore — in the Rs 35,000 crore biscuit market, the Bengaluru-based company is looking at setting up a new plant, which will help it double production capability.

The company plans to set up the plant in the central part of the country, with an investment of around $12 million (Rs 87 crore). “The new facility will be operational in the next 14-18 months, and have the capacity to produce 100 tonnes of cookies per day. Additionally, it will also have (production) lines for snack bars and crackers,” said Sreenivasulu Vudayagiri, a company long-timer who has recently taken over as the chief executive officer.

The company’s other factory located in Tumakuru near Bengaluru has a manufacturing capacity of 36,000 tonnes per annum. Unlike its bigger competitors such as Britannia, Unibic’s focus has been largely the urban market, which has insulated it from the demand slowdown in the FMCG sector.

According to Vudayagiri, the company has been seeing a steady growth of 15 per cent, which is three times higher than the industry average. By 2023, Unibic has set a target to double its revenue to Rs 1,000 crore, backed by plans to diversify into newer categories such as crackers and new product launches. In the current year, Unibic plans to launch four new variants of cookies.

“Unibic is a niche segmented biscuit company. It is bound to do better than the mass market offerings. In many ways, this space is insulated for the moment as price and affordability elasticity is higher out here,” said Harish Bijoor, founder of Harish Bijoor Consults.

With 30 different variants of cookies to offer, Unibic is tweaking its flavours and packaging to gain traction in the north, east and western parts of the country. The company has recently launched a butter variant of cookies called Butterly, specifically for central India where, according to Vudayagiri, people have affinity for butter cookies. It has also gained traction in sales of ginger cookies in the northern states during the winter months of December and January.

While the rural India has so far been a difficult market to crack, Unibic is trying to get a foothold by packaging products at cheaper price points of Rs 5 and Rs 10. Currently, around 45 per cent of Unibic’s revenue is generated from southern India.