Snacks vanished in lockdown but India's biscuit market was happily munching

With most snacks disappearing from the market during the lockdown, biscuits have turned out to be the preferred choice for consumers. The organised biscuit market in India – valued at Rs 37,000 crore in size – grew at double the rate of growth in April-May against pre-Covid levels as people stocked up during the lockdown.
 

Multiple industry executives and analysts reveal that from the levels of about 7-8 per cent in terms of growth rate seen before the lockdown, the organised market surged to levels of about 12-15 per cent in April-May.
 

This growth rate is likely to taper off in June, they said, as lockdown restrictions ease and consumers look at other snack options.
 

Unibic India’s chief executive officer (CEO) Srini Vudayagiri attributes the surge in growth rate in April-May to pantry loading as well as increase in in-home consumption. He said biscuits are a convenient and affordable snacking option for many.

“Biscuits are easy to pick up, store and consume. Also, they are affordable, with price points as low as Rs 5 even for creams and cookies and not just glucose biscuits. Therefore, it was an item that consumers quickly turned to during the lockdown,” he said. It also helped some players such as Parle Products keep supply lines going during the lockdown despite labour shortage and restriction in movement of goods.

 

The country’s top three biscuit players, including Parle, Britannia and ITC, have seen at least a 300-500 basis-point improvement in volume sales in April-May compared to a year ago. One basis point is one-hundredth of a percentage point.
 

Mayank Shah, senior category head, Parle Products, said the company saw a significant improvement in its market share for biscuits in April-May, led by Parle-G. “Our overall market share in biscuits is now 31.5 per cent versus 26.5 per cent, which was our market share before the lockdown began,” he added.
 

Britannia Industries saw a 300 basis-point improvement in volume growth for its biscuits business in April-May against the pre-Covid period, said analysts tracking the company, as consumption peaked during the lockdown. A mail sent to the company elicited no response till the time of going to press.
 

But in an investor call last week, Varun Berry, managing director, Britannia, said revenue growth of the company in April and May was 20 per cent and 28 per cent, respectively, led by stockpiling and in-home consumption of biscuits.
 

He also the company had followed an ‘80:20’ principle during the lockdown period, devoting much of its attention to 20 per cent of its product portfolio that gave the firm 80 per cent of its volumes in April-May. Analysts say that some of these products that did well during the lockdown included Good Day, NutriChoice and Marie.

Hemant Malik, divisional chief executive, foods division, ITC, said the company witnessed an “unprecedented surge” in demand for biscuits such as Sunfeast and Mom’s Magic during the lockdown. “Particularly, Sunfeast Veda Marie in the health and wellness segment received encouraging response from consumers,” he said.
 

Analysts expect the organised biscuit market to taper off to levels of about 10 per cent in terms of growth rate in June, though it will be higher than the growth rate seen during pre-Covid days. “While pantry-loading is no longer visible as supply lines have been restored by most companies, in-home consumption will continue to be there as consumers remain nervous about eating out,” said Kaustubh Pawaskar, associate vice-president, research, at brokerage Sharekhan. “So, category growth rates will continue to remain high versus pre-Covid, though in comparison to April-May, it will be lower,” he said.
 

Most biscuit majors are now getting their attention back to different parts of their portfolio and not just high-volume or popular brands, tapping into trends such as health and wellness in particular. Some firms are also inking distribution tie-ups with delivery platforms such as Dunzo (Britannia), Domino’s and BigBasket (ITC).