International BusinessBiscuit-makers take on traditional sweets
For most consumer product players in the country, the upcoming festive season is being looked upon as the best platform to return into the black. However, for the biscuit and confectionary makers, the customer preference of traditional sweets over packaged items is expected to affect business. To counter this, companies are devising strategies to hold their profits through gift hampers and customised products.
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“We consider the festive season a lean season. The indulgence in traditional snacks cannot match cookies and biscuits. We will offer products like gift packs this season but the market for this is still miniscule in the country,” said Mayank Shah, group product manager, Parle Products. Nearly 80 per cent of the company’s revenues come from biscuits, 16 per cent from confectionaries and the rest from snacks.
The biscuit market is estimated to be around Rs 11,000 crore of which around Rs 4,000 crore comes from cookies and higher-end biscuits. Industry players say there could be a 10 per cent dip in sales this season which will pick up strongly after a few months when schools re-open after vacations.
Cookie Man, the Australian cookie brand is looking at introducing festival offers to increase revenues. “We have ordered ceramic jars and containers from China for customised cookie gift items. We will have 15-20 varieties in packaging to attract customers in the gift market,” said S B P Pattabhi Rama Rao, president of Australian Foods India, the company that launched the Cookie Man brand in India. He said the company’s regular cookies were usually an impulse buy and would be fairly stable in the upcoming season even as gifts notch up a 15-20 per cent growth in the same period. “Traditional sweets come with a short shelf life as compared to biscuit, cookie and confectionary products which comes as an advantage to us,” he said.
Companies admit that the market for chocolates and biscuits as gifts is still growing in the country and may take a few years to catch up with traditional sweets. However, these products have found favour with corporates in the last number of years and despite the lean economy, it is expected that there will be an upsurge in sale of corporate hampers.
“It is natural for people in India to go for traditional sweets as compared to chocolates of sweets but there is a lot of innovation happening in the sector right now. We are seeing companies add an Indian flavour like Saffron or Pista to their products to give a traditional touch,” said Abhijit Saha, Chef and Director of Avant Garde Hospitality. He added that there was a growing section of people and corporate houses who prefer customised gifts just to stand out from regular sweet products.