trend analysis of snack food market in india

TREND ANALYSIS OF SNACK FOOD MARKET IN INDIA 

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TREND ANALYSIS OF SNACK FOOD MARKET IN INDIA 

POST GRADUATE DIPLOMA IN MANAGEMENT

MARKETING

GIRISH KUKREJA

Under The Guidance of  Prof. Mahesh Soni

TREND ANALYSIS OF SNACK FOOD MARKET IN INDIA 

POST GRADUATE DIPLOMA IN MANAGEMENT

MARKETING

GIRISH KUKREJA

Under The Guidance of  Prof. Mahesh Soni

I wish to to express my gratitude to those who, helped me in accomplishing acco mplishing this challenging project on ―TREND ANALYSIS OF SNACK FOOD MARKET IN INDIA‖No amount of written expression can show my deepest sense of gratitude to my guide PROF. MAHESH SONI (FACULTY MARKETING), IPER, PGDM. Who motivated me to receive enormous amount of  input and inspiration at the various stages during my project preparation and assisted me in bringing out my project in the present form.I thankfully acknowledge an active support by my Project Guide who overwhelmingly shared his knowledge with me and strengthened my conceptual framework. I am also thankful to all the Marketing Faculties of INSTITUTE OF PROFESSIONAL EDUCATION AND RESEARCH (IPER), BHOPAL who supported me in various ways and enligh enlighte tened ned me about ab out the the valuable valuable informa nformatio tion n pertaining pe rtaining to my researc rese arch h work. work .

GIRISH KUKREJA 

TOPIC

1.CONCEPTUAL OVERVIEW INDUST INDUSTY Y OVERVIE O VERVIEW W

2.RESEARCH METHODOLOGY OBJECTIVE OBJECTIVE OF STUDY RATIONAL OF THE STUD ST UDY Y METHODOLOGY DATA SOURCE DATA COLLECTION METHODOLOGY LIMITATIONS SIGNIFICANCE

3.THEORITICAL BACKGROUND MAJOR PLAYERS IN THE MARKET MARKETING STRATEGY

4.DATA ANALYSIS & INTERPRETATION 5.CONCLUSION BIBLIOGRAPHY

EXECUTIVE SUMMARY-

This is a project to know the biscuit industry ,to estimate the reason for the change in the consumption pattern of the consumers .An attempt to know the trend of the snack food market(chips and biscuits) in India .Major players in the industry are taken ,their contribution to the industry ,their market share and their sales for the past five years is taken .It results in reflecting reflect ing the trend prevailing preva iling in the country ,the gro gro wth o f the snack food ma ma rket in India Ind ia .The .The change change ,s hift in the the eating eat ing habit of the India India n peopl peop les and their tastes and pre ferences towards the biscuit and chips market of the country. The change in the variety of the snack food offered ,the strate strategi gies es adopted b y the the d ifferent ifferent compani compa nies(p es(pllayers in the ind ind ustry) ,the ,the variants variants in the types of  flavors flavors produced , an a nd inve nted nted to meet the changing tastes of the co nsumers nsumers and al a lso to surviv sur vivee and take a lead in the growing growing com co mpetiti pe titio o n of this this market. mark et.

INTRODUCTIONThe snack food market in India is $3 billion; with the organized segment accounting for almost half of the market share and growing at rate o f 15 to 20 percent per year. However, the imported snack food market is growing but small ($30 million) due to high import duties, a complex distribution network and availability of relatively cheaper domestic snack foods. Over the past six years, exports of U.S. snack foods to India have grown almost ten times to $5 million in CY 2007. A growing economy, changing lifestyles, rise in disposable incomes and preference for quality products of U.S. origin will continue to fuel growth of imported U.S. snack food items in India. Around 1,000 snack items and 300 types of savories of diverse tastes, forms,textures, aromas, bases, sizes, and fillings are sold in India Potato chips and potato based products are by far the largest product category with over 85 percent share ofthe salty snack market, followed by snack nuts, chickpea and other pulse-based savory snacks. Popcorn, diet snacks (soy nuts, bread sticks), breakfast cereals,baked & roasted snacks (biscuits, spec ialty breads, chocolate coated snacks, cookies etc.) and cheese snacks are in high demand across organized retail cha ins. Healthfoods, health food supplements and convenient foods are also rapidly growing segments.

As per an industry estimate, the branded and organized snack food segment dominated by major   players such as Frito Lay, Con Agra, Kellogg‘s, Marico, Dabur, HLL, ITC, Parle, Haldiram‘s, Nestle, Britannia, Cadbury, Bikano and Balaji is estimated to grow by 15 to 20 percent per year; whereas the growth of un-branded snack food is likely to grow modestly at 8 percent per year in the near future. Product pricing for branded products are normally 15 to 20 percent greater than for the unbranded food segment due to higher overhead expenses. Snack food packaging ranges from 35/40 gm sachets to 400 gm economy packs. Small packs work very well in India. A biscuit (pronounced / ˈbɪsk  ɨt/) is a baked edible product. The term is used to apply to two distinctly different products in North America and the Commonwealth Nations. In the United States it relates to a small soft leavened bread, somewhat similar to a scone. In Commonwealth English, it commonly is used to refer to a small and hard, often sweetened, flour-based product, most akin in American English to a cookie, or sometimes in the case of  cheese biscuits, a cracker.

India Biscuits Industry is the largest among all the food industries and has a turn over of around Rs.3000 crores. India is known to be the second largest manufacturer of biscuits, the first being USA. It is classified under two sectors: organized and unorganized. Bread and biscuits are the major part of the bakery industry and covers around 80 percent of the total bakery prod ucts in India. Biscuits stands at a higher value and production level than bread. This belongs to the unorganized sector of the bakery Industry and covers over 70% of the total production. India Biscuits Industry came into limelight and started gaining a sound status in the bakery industry in the later part of 20th century when the urbanized society called for ready made food products at a tenable cost. Biscuits were assumed as sick-man's diet in earlier days. Now, it has become one of the most loved fast food product for every age group. Biscuits are easy to carry, tasty to eat, cholesterol free and reasonable at cost. States that have the larger intake of biscuits are Maharashtra, West Bengal, Andhra Pradesh, Karnataka, and Uttar Pradesh. Maharashtra and West Bengal, the most industrially developed states, hold the maximum amount of consumption of biscuits. Even, the rural sector consumes around 55 percent of the biscuits in the bakery products. The total production of bakery products have risen from 5.19 lakh tonnes in 1975 to 18.95 lakh tonnes in 1990. Biscuits contributes to over 33 percent of the total production of  bakery and above 79 percent of the biscuits are manufactured by the small scale sector of bakery industry comprising both factory and non-factory units. The production capacity of wafer biscuits is 60 MT and the cost is Rs.56,78,400 with a motive power of 25 K.W. Indian biscuit industry has occupied around 55-60 percent of the entire bakery production. Few years back, large scale bakery manufacturers like cadbury, nestle, and brooke bond tried to trade in the biscuit industry but couldn't hit the market because of the local companies that produced only biscuits. The Federation of Biscuit Manufacturers of India (FBMI) has confirmed a bright future of India Biscuits Industry. According to FBMI, a steady growth of 15 percent per annum in the next 10 years will be achieved by the biscuit industry of India. Besides, the export of biscuits will also surpass the target and hit the global market successfully.

RESEARCH METHODOLOGY

TITLETrend analysis of snack food market in India.

OBJECTIVETo know the trend of the snack food industry(biscuits and chips) in India To observe the taste and preferences of the Indian consumers towards snack food.

RATIONAL OF THE STUDYTo observe the various players in the snack food market ,the developments and the variations being offered in order to survive in the growing competition in this industry .To know the growth ,penetration and the impact snack food market is able to develop among its Indian consumers.

DATA SOURCE-

Market research is generally either primary or secondary. Primary market research is when a company carries out research first hand. Primary market research is more reliable than secondary research because you know that the information you have gathered is accurate, as you have collected it yourself. It is also specific to your type of product/service. On the other hand, it is very time consuming and costs more, for example in consumer panels, products have to be given away for free so that they can be tested. This type of research can also be called field research.

Some forms of primary market research are as follows: Questionnaires/Surveys Interviews (can be done one-to-one, in a group or over the internet) Observation Focus Group/Consumer Panel - asking customers how they feel about their products In secondary research, the company uses information from other sources that has already been researched by somebody else. Instead of carrying out research yourself like in primary research, you simply use somebody else's results that have already been collected which have been carried out in similar ways to how you would have carried it out. The advantages of secondary research are that it is relatively cheap, easily accessible and can be done very quickly. Disadvantages of  secondary research are that it is often not specific to your area of research and the data used can be biased and is difficult to validate. As you have not collected it yourself, you cannot be sure how accurate it is as it could be biased. This type of research can also be called desk research. Some forms of secondary market research are as follows:      

Websites Magazines News/Newspapers Textbooks Journals - specialist magazines Other companies financial report Data, or facts, may be derived from several sources. Data can be classified as primary data and secondary data. Primary data is data gathered for the first time by the researcher; secondary data is data taken by the researcher from secondary sources, internal or external. The researcher must thoroughly search secondary data sources before commissioning any efforts for collecting primary data. There are many advantages in searching for and analyzing data before attempting the collection of primary data. In some cases, the secondary data itself may be sufficient to solve the problem. Usually the cost of gathering secondary data is much lower than the cost of organizing primary data. Moreover, secondary data has several supplementary uses. It also helps to plan the collection of primary data, in case, it becomes necessary. We shall therefore discuss secondary data first and then take up primary data. Secondary data is of two kinds, internal and external. Secondary data  –  whether internal or external –  is data already collected by others, for purposes other than the solution of  the problem on hand.

Business firms always have as great deal of internal secondary data with them. Sales statistics constitute the most important component of secondary data in marketing and the researcher uses it extensively. All the o utput of the MIS of the firm generally constitutes internal secondary data. This data is readily available; the market researcher gets it without much effort, time and money. Sources of External Secondary Data  –  Examples. The Internet is a great source of  external secondary data. Many published, statistics and figures are available on the internet either free or for a fee. In research, Secondary data is collecting and possibly processing data by people other than the researcher in question. Common sources of secondary data for social science include censuses, large surveys, and organizational records (Mintel). In sociology primary data is data you have collected yourself and secondary data is data you have gathered from primary sources to create new research. In terms of historical research, these two terms have different meanings. A primary source is a book or set of archival records. A secondary source is a summary of a book or set of records. Advantages to the secondary data collection method are - 1) it saves time that would otherwise be spent collecting data, 2) provides a larger database (usually) than what would be possible to collect on ones own However there are disadvantages to the fact that the researcher cannot personally check the data so it's reliability may be questioned Data can be defined as the quantitative or qualitative values of a variable. Data is plural of Datum which literally means to give or something given. Data is thought to be the lowest unit of information from which other measurements and analysis can be done. Data can be numbers, images, words, figures, facts or ideas. Data in itself cannot be understood and to get information from the data one must interpret it into meaningful information. There are various methods of interpreting data. Data sources are broadly classified into primary and secondary data.

Importance of Data and Data Collection Data is one of the most important and vital aspect of any research studies. Researches conducted in different fields of study can be different in methodology but every research is based on data which is analyzed and interpre ted to get information. Data is the basic unit in statistical studies. Statistical information like census, population variables, health statistics, and road accidents records are all developed from data. Data is important in computer science. Numbers, images and figures in computer are all data

Types of Data Primary Data:

Data that has been collected from first-hand-experience is known as primary data. Primary data has not been published yet and is more reliable, authentic and objective. Primary data has not been changed or altered by human beings, therefore its validity is greater than secondary data

Importance of Primary Data: Importance of Primary data cannot be neglected. A research can be conducted without secondary data but a research based on only secondary data is least reliable and may have biases because secondary data has already been manipulated by human beings. In statistical surveys it is necessary to get information from primary sources and work on primary data: for example, the statistical records of female population in a country cannot be based on newspaper, magazine and other printed sources. One such source is old and secondly they contain limited information as well as they can be mislead ing and biased.

Sources of Primary Data: Sources for primary data are limited and at times it becomes difficult to obtain data from primary source because of either scarcity of population or lack of cooperation. Regardless of any difficulty one can face in collecting primary data; it is the most authentic and reliable data source. Following are some of the sources of primary data.

Experiments: Experiments require an artificial or natural setting in which to perform logical study to collect data. Experiments are more suitable for medicine, psychological studies, nutrition and for other scientific studies. In experiments the experimenter has to keep control over the influence of any extraneous variable on the results.

Survey: Survey is most commonly used method in social sciences, management, marketing and psychology to some extent. Surveys can be conducted in different methods.Questionnaire: is the most commonly used method in survey. Questionnaires are a list of questions either openended or close -ended for which the respondent give answers. Questionnaire can be conducted via telephone, mail, live in a public area, or in a n institute, through e lectronic mail or through fax and other methods.Interview: Interview is a face-to-face conversation with the respondent. In interview the main problem arises when the respondent deliberately hides information otherwise it is an in depth source of information. The interviewer can not only record the statements the interviewee speaks but he can observe the body language, expressions and other reactions to the questions too. This enables the interviewer to draw conclusions easily.Observations: Observation can be done while letting the observing person know that he is being observed or without letting

him know. Observations can also be made in natural settings as well as in artificially created environment.

Secondary Data: Data collected from a source that has already been published in any form is called as secondary data. The review of literature in nay research is based on secondary data. Mostly from books,   journals and periodicals

Importance of Secondary Data: Secondary data can be less valid but its importance is still there. Sometimes it is difficult to obtain primary data; in these cases getting information from secondary sources is easier and possible. Sometimes primary data does not exist in such situation one has to confine the research on secondary data. Sometimes primary data is present but the respondents are not willing to reveal it in such case too secondary data can suffice: for example, if the research is on the psychology of transsexuals first it is difficult to find out transsexuals and second they may not be willing to give informatio n you want for your research, so you can co llect data from books or other published sources.

Sources of Secondary Data: Secondary data is often readily available. After the expense of electronic media and internet the availability of secondary data has become much easier.Published Printed Sources: There are variety of published printed sources. Their credibility depends on many factors. For example, on the writer, publishing company and time and date when published. New sources are preferred and old sources should be avoided as new technology and researches bring new facts into light.Books: Books are available today on any topic that you want to research. The use of books starts before even you have selected the topic. After selection of topics books provide insight on how much work has already been done on the same topic and you can prepare your literature review. Books are secondary source but most authentic one in secondary sources. Journals/periodicals: Journals and periodicals are becoming more important as far as data collection is concerned. The reason is that journals provide up-to-date information which at times books cannot and secondly, journals can give information on the very specific topic on which you are researching rather talking about more general topics. Magazines/Newspapers: Magazines are also effective but not very reliable. Newspaper on the other hand are more reliable and in some cases the information can only be obtained from newspapers as in the case of some political studies. Indian snack food market — 

Report Highlights:

The snack food market in India is $3 billion; with the organized segment accounting for almost half of the market share and growing at rate o f 15 to 20 percent per year. However, the imported snack food market is growing but small ($30 million) due to high import duties, a complex distribution network and availability of relatively cheaper domestic snack foods. Over the past six years, exports of U.S. snack foods to India have grown almost ten times to $5 million in CY 2007. A growing economy, changing lifest yles, rise in disposable incomes and preference for quality products of U.S. origin will continue to fuel growth of imported U.S. snack food items in India.

SECTION I: Market Summary Around 1,000 snack items and 300 types of savories of diverse tastes, forms,textures, aromas, bases, sizes, and fillings are sold in India Potato chips and potato based products are by far the largest product category with over 85 percent share ofthe salty snack market, followed by snack nuts, chickpea and other pulse-based savory snacks. Popcorn, diet snacks (soy nuts, bread sticks), breakfast cereals,baked & roasted snacks (biscuits, spec ialty breads, chocolate coated snacks, cookies etc.) and cheese snacks are in high demand across organized retail cha ins. Healthfoods, health food supplements and convenient foods are also rapidly growing segments.

As per an industry estimate, the branded and organized snack food segment dominated by major   players such as Frito Lay, Con Agra, Kellogg‘s, Marico, Dabur, HLL, ITC, Parle, Haldiram‘s, Nestle, Britannia, Cadbury, Bikano and Balaji is estimated to grow by 15 to 20 percent per year; whereas the growth of un-branded snack food is likely to grow modestly at 8 percent per year in the near future. Product pricing for branded products are normally 15 to 20 percent greater than for the unbranded food segment due to higher overhead expenses. Snack food packaging ranges from 35/40 gm sachets to 400 gm economy packs. Small packs work very well in India. A biscuit (pronounced / ˈbɪsk  ɨt/) is a baked edible product. The term is used to apply to two distinctly different products in North America and the Commonwealth Nations. In the United States it relates to a small soft leavened bread, somewhat similar to a scone. In Commonwealth English, it commonly is used to refer to a small and hard, often sweetened, flour-based product, most akin in American English to a cookie, or sometimes in the case of  cheese biscuits, a cracker.

India Biscuits Industry is the largest among all the food industries and has a turn over of around Rs.3000 crores. India is known to be the second largest manufacturer of biscuits, the first being USA. It is class ified under two sectors: organized and unorganized. Bread and biscuits are the major part of the bakery industry and covers around 80 percent of the total bakery products in India. Biscuits stands at a higher value and production level than bread. This belongs to the unorganized sector of the bakery Industry and covers over 70% of the total production. India Biscuits Industry came into limelight and started gaining a sound status in the bakery industry in the later part of 20th century when the urbanized society called for ready made food products at a tenable cost. Biscuits were assumed as sick-man's diet in earlier days. Now, it has become one of the most loved fast food product for every age group. Biscuits are easy to carry, tasty to eat, cholesterol free and reasonable at cost. States that have the larger intake of biscuits are Maharashtra, West Bengal, Andhra Pradesh, Karnataka, and Uttar Pradesh. Maharashtra and West Bengal, the most industrially developed states, hold the maximum amount of consumption of biscuits. Even, the rural sector consumes around 55 percent o f the bisc uits in the bakery products. The total production of bakery products have risen from 5.19 lakh tonnes in 1975 to 18.95 lakh tonnes in 1990. Biscuits contributes to over 33 percent of the total production of  bakery and above 79 percent of the biscuits are manufactured by the small scale sector of bakery industry comprising both factory and non-factory units. The production capacity of wafer biscuits is 60 MT and the cost is Rs.56,78,400 with a motive power of 25 K.W. Indian biscuit industry has occupied around 55-60 percent of the entire bakery production. Few years back, large scale bakery manufacturers like cadbury, nestle, and brooke bond tried to trade in the biscuit industry but couldn't hit the market because of the local companies that produced only biscuits. The Federation of Biscuit Manufacturers of India (FBMI) has confirmed a bright future of India Biscuits Industry. According to FBMI, a steady growth of 15 percent per annum in the next 10 years will be achieved by the biscuit industry of India. Besides, the export of biscuits will also surpass the target and hit the global market successfully.

Major players in the biscuit marketYear

200304

200405

200506

200607

200708

200809

Annual Production(Lakh MT)

11.00

12.54

14.29

16.14

17.14

19.5

INTERPRETATIONWe can see that the production has increased at an annual rate of 18% per annum .This shows the increasing demands and preferences turning in favors of biscuits, across the various years as shown in the data.Biscuit market in India ,a growing industry facing good competition and gaining attention.

Main Categories of Biscuits : Glucose, Marie, Sweet, Salty, Cream & Milk. Glucose biscuits accounts for more than 50% of the total biscuit market value, Parle G dominate this market with more than 60% share followed by Britannia and ITC.

Brands :Major brands - The Indian biscuit industry is dominated by major brands like Parle, Britannia,

and Sunfeast. Also the category has strong regional brands such as Priya Gold-North, CremicaNorth & West, Dukes-South and Anmol-East & North. Horlicks, Biskfarm-East, Rose-Andhra Pradesh & South, Sobisco-East and North East also launched in Andhra Pradesh and Madhya Pradesh., Nezone- North East, Bakewell. Other popular brands

Market Share Breakdown The Indian biscuit industry is dominated by brands like Parle,

Britannia and Sunfeast.

Market Share Of Biscuits In India-2010

Others 5%

Priyagold 6%

Britannia Britannia 37%

ITC Sunfeast 22%

Parle ITC Sunfeast Priyagold Others

Parle 30%

INTERPRETATIONMarket Leader Is Britannia with 37 % market Share.Parle is c lose co mpetitor to Britannia in the growing market of biscuits.During last 2 years it has been seen that ITC has increased its share from 17 % to 22 %, it is because of its good marketing strategies, good quality & competitive pricing.Due to new entrants and change in taste of customer especially baked cookies the market share of the companies is fluctuating from couple of  years

Consumption Pattern across Various Regions

Consumption of biscuits is even across the regions

INTERPRETATION

We can see that the biscuit market across the various regions of the country is evenly distributed. A slight variation is seen across regions with the eastern region having a comparative lead(28%).This shows that the consumption is regular and good all across the country.

2009 – New Prospects in the Indian Biscuit Industry GlaxoSmithKline Consumer Healthcare: Junior Horlicks Biscuits-toddler biscuit category.PepsiCo India Launched biscuit brand Aliva, it will be produced by food division Frito Lay India.United Biscuits (UK), world‘s third largest biscuit company, is set to enter India market.Shakti Bhog plans to enter biscuits segment. Biscuit industry is the largest segment of the grain milling industry and constitutes about 55 -60% of the entire bakery range. In the past several years MNCs like Cadbury, Brooke Bond and Nestle tried to enter into the biscuit segment but were not successful. These players found it difficult to compete with the unorganised sector players in the lower / popular segment of the market in view of intense price competition. In the upper end of the market, the market size was small. With the de-control, several global players have entered the market and more players are expected to set up shop in the country. Infoquest India's report on the biscuit market in India gives the salient features of the industry in a clear and concise format.

MAJOR PLAYERS IN BISCUIT INDUSTRY BRITANNIA Britannia was incorporated in 1918 as Britannia Biscuits Co Ltd in Calcutta.In 1924, Pea Frean UK acquired a controlling stake, which later passed on to the Associated Biscuits International (ABI) a UK based company. During the ‘50s and‘ 60s, Britannia expanded operations to Mumbai, Delhi and Chennai. Exports of sea foods started in the ‘70s. In 1987, Nabisco, a well known European food company, acquired ABI. In 1989, J M Pillai, a Singapore based NRI businessman along with the Groupe Danone acquired Asian operations of Nabisco, thus acquiring controlling stake in Britannia. Later, Grop Danone and Nusli Wadia took over Pillai‘s holdings. In 1977, the Government reserved the industry for small scale sector, whichconstra ined Britannia's growth. Britannia adopted a strategy of engaging contract packers (CP) in the small scale sector. This led to several inefficiencies at the operating level. In April ‘97, theGovernment dereserved the biscuit sector from small scale. Britannia has expanded captive manufacturing facilities and has modernized and upgraded its facilities in the last five years. It has also forayed into the Dairy Business with the launch of Cheese, Butter, Ghee, Dairy whitener and flavored milk products.

Key Products Tiger, Good Day, Bourbon, 50-50, Treat, Milk Bikis, Marie Gold, NutriChoice, Timepass, Little Hearts

Parent Group To Estimate the Biscuits Industry and identify the critical success factorsBrita nnia's controlling stake is jointly with Groupe Danone and Nusli Wadia.Groupe Danone is one of the leading players in the world in bakery productsbusiness. It acquired interest in Britannia Industries in 1989 and acquired controlling stake in 1993..Nusli Wadia group is one of the leading industrialhouses in the country, with interests mainly in textiles and petrochemicals.

Plant locations Britannia's plants are located in the 4 major metro cities - Kolkatta, Mumbai,Delhi and Chennai. A large part of products are also outsourced from third party producers. Dairy products are out sourced from three producers -Dynamix Dairy based in Baramati, Maharashtra, Modern Dairy at Karnal in Haryana) and Thacker Dairy Products at Howrah in West Bengal.

Business Britannia core businesses constitute of Bakery and Dairy products. Bakeryproducts account for 90% of the revenues and include Biscuits, Bread and Cake & Rusk. Dairy products contribute to 10% of Britannia‘s annual turnover of Rs13.38bn. Over the years, Britannia has introduced and developed a full line of brands in all segments of  the biscuit market. The company's Tiger range of glucosebiscuits have been a runaway success, enabling the company to expand itspresence in the largest gluco category of the biscuit market. In salty-sweet segment Parle‘s Krackjack and Britannia‘s Fifty-Fifty compete very closely. Britannia‘s other major brands include Marie , Thin Arrowroot, Bourbon, Milkbikis, Nice, Snax, Coconut Crunchies, Pure Magic, Good Day, Jim-Jam and Checkers. It has also launched biscuits like Vita MarieGold, Nutri-Choice etc, under the health positioning. Bakery products major, Britannia Industries, had a brilliant FY04.

The company reported over 11% topline growth during the year, where most of its FMCG peers found it tough to grow the topline. Focus on improving cost efficiencies aided operating margin expansion. The company finished FY04 with nearly 20% bottomline growth. The key reason for the strength in topline is believed to be the increasing affordability of branded biscuits that aided volume growth. Moreover, the company's repackaged and relaunched most of  its biscuit brands. This seemed to have kept the momentum going for Britannia. Apart from this,Britannia continued to focus on ways to bring down its costs. VRS and lower cost of debt

has helped the company improve profitability.The hiving off of properties has led to lower depreciation provisioning. Thecompany also received an order in favour of closure of its Mumbai plant. The matter though is still sub-judice. After the break away from the dairy business, the company's cash flows seemed to have improved significantly.The company reported a strong 66% growth in other income, seemingly led by sale of the company's mutual fund investments. All this led to a 36% growth in profit before tax and extraordinary items.

Threat from competition The key threats for the company are the growing competition in the biscuit segment and the possibility of pricing pressures in the mass market.Competitors such as Parle-G and Surya Foods have already carved out a significant share in the mass market through aggressive pricing, where Britannia's brand, Tiger, is trying to enlarge its share. At the higher end of the market too, competition is hotting up, with players such as ITC rolling out new extensions.Britannia's profits in 2003-04 received a one-time boost from the cut in excise duty on biscuits. This may not be repeated this fiscalHowever, the company's new cost-reduction measures may help alleviate these pressures to some extent.

INTERPRETATION

The price of the company going up in the year from 540(approx.) to 621.it signifies the strength the brand developed and the capitalization it got in the given year.

However, the company's new cost-reduction measures may help alleviate these pressures to some extent. The company has recently initiated proceedings to close down its Mumbai unit and set up new manufacturing facilities at Uttaranchal, which will significantly lower its excise and tax burden.Britannia Industries Ltd. (BIL) is one of the leading producers of biscuits and bakery prod ucts in the country. BIL‘s marketing campaigns riding on the cricket mania especially during the World Cup have probably been the most successful, which have added to its growth and visibility. The findings o f a recent study conducted by a private channel have also rated Britannia as the most liked biscuit brand among kids.Union Budget 2003-04 halved the excise duty on biscuits from 16% to 8%. Excise duty of 16% on biscuits was quite high and hence, BIL was be the biggest beneficiary of this excise duty reduction. This also took away some of the pricing advantage from the unorganized sector and the pricing differential between the organised and the unorganized sectors would also be bridged.

Last 5 years market of BritanniaMar '06

Mar '07

Mar '08

Mar '09

Mar '10

Sales Turnover

1,817.92

2,317.11

2,617.66

3,142.89

3,424.58

Operating Profit

200.96

128.69

232.32

224.16

204.06

INTERPRETATION

The sales of the company has almost doubled in the last five years.it reflects the success of the company and also the changes in the tastes and references of the consumers which are in favor of the snack food market and the company.

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The company has shown consistent improvement in its sales in the consecutive years. Its operating profit has been low ,because of the high competition and the threat from new entrants.

BIL HIGHLIGHTS: 

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BIL‘s biscuit volume growth has outpaced the segment driven by the various initiatives taken by the management. Tiger biscuits launch in July 1997 led Britannia‘s foray into the glucose category. Tiger now contributes about 40% to the biscuits turnover and has  been Britannia‘s biggest success.

BIL has decided to focus on seven core brands in the biscuits and akerycategory. The brands include Good Day, Tiger, 50-50, Snax, and the Cream Treat brands, among others. Last year, the co mpa ny acquired wality biscuits. Maska Chaska, the snack b iscuit extension of Britannia's 50-50, is selling more than the mother brand in certain markets like north Karnataka. And in doing so, Maska Chaska is contributing nearly 30% to the mother brand 50-50's total sales across the country.

To establish a presence at various points of consumer visits, the company is now in talks with specialty coffee outlets and petrol pumps to place its products at strategic sites.

Britannia, which has agreed in-principle to acquire a 49% stake in Kwality Biscuits and Snacko Bisc, has the option of hiking the holding in the two companies to 100%. The company had acquired Kwality Biscuits and Snacko Bisc to increase its presence in the southern market. Britannia is expected to complete the acquisition of the 49% stake in Kwality Biscuits and Snacko Bisc by the end of the current fiscal.

The effect of a poor monsoon last year is not likely to affect growth significantly. Though, Britannia derives close to 40% of its sales from the rural markets, the biscuit category is likely to be more resilient compared

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Other factors, which support its higher-than- market growth are the existence of relatively smaller players like Bakeman‘s and Nutrine within the rganised sector that continue to be soft targets and the aggressiveness of Britannia.

PARLE A long time ago, when the British ruled India, a small factory was set up in the suburbs of of  Mumbai city, to manufacture sweets and toffees. The year was 1929 and the market was dominated by famous international brands that were imported freely. Despite the odds and unequal competition, this company called Parle Products, survived and succeeded, by adhering to high quality and improvising from time to time. A decade later, in 1939, Parle Products began manufacturing biscuits, in addition to sweets and toffees. Having already established a reputation for quality, the Parle brand name grew in strength with this diversification. Parle Glucose and Parle Monaco were the first brands of biscuits to be introduced, which later went on to become leading names for great taste and quality.

Key Products : Parle - G , Hide and Seek ,Krackjack ,Hide & Seek Milano ,Magix ,Digestive Marie ,Monaco ,Parle Marie ,Kreams ,Milk Shakti ,Parle 20-20 Cookies ,Golden arcs ,Nimkin ,Kreams Gold ,Chox ,Monaco Jeera

The strength of the Parle Brand Over the years, Parle has grown to become a multi-million US Dollar company. Many of the Parle products - biscuits or confectionaries, are market leaders in their category and have won acclaim at the Monde Selection, since 1971. Today, Parle enjoys a 40% share of the total biscuit market and a 15% share of the total confectionary market, in India. The Parle Biscuit brands, such as, Parle-G, Monaco and Krackjack and confectionery brands, such as, Melody, Poppins, Mangobite and Kismi,enjoy a strong imagery and appeal amongst consumers. Be it a big city or a remote village of India, the Parle name symbolizes quality, health and great taste! And yet, we know that this reputation has been built, by constantly innovating and catering to new tastes. This can be seen by the success of new brands, such as, Hide & Seek, or the single twist wrapping of Mango bite. In this way, by concentrating on consumer tastes and preferences and emphasizing Research & Development, the Parle brand grows from strength to strength.

The Quality Commitment

Parle Products has one factory at Mumbai that manufactures biscuits &confectioneries while another factory at Bahadurgarh, in Haryana manufactures biscuits. Apart from this, Parle has manufacturing facilities at Neemrana, in Rajasthan and at Bangalore in Karnataka. The factories at Bahadurgarh and Neemrana are the largest such manufacturing facilites in India. Parle Products also has 14 manufacturing units for biscuits & 5 manufacturing units for confectioneries, on contract. All these factories are located at strategic locations, so as to ensure a constant output & easy distribution. Each factory has state-of-the-art machinery with automatic printing & packaging facilities.All Parle products are manufactured under the most hygienic conditions.Great care is exercised in the selection & quality control of raw materials,packaging materials & rigid quality standards are ensured at every stage of the manufacturing process. Every batch of biscuits & confectioneries are thoroughly checked by expert staff, using the most modern equipment.

Last 5 years market of Parle-

2005

2006

2007

2008

SALES (crores)

750.64

1004.57

1405.31

1554.74

PROFIT

86.50

86.85

83.28

137.0

2009

2115.86

92.74

INTERPRETATIONThe sales of Parle have been shooting up .It has tripled itself in just the span of three years .in the year 2009 ,it had gone up by 30% .hence ,it reflects the changes in the eating habits (consumption) of Indians.Parle g is the largest selling gluco biscuit company in the world .Biscuits have been widely accepted as a complementary serve during tea-time (morning & evening).they are ready to eat, instantaneo1usly consumable.The profits of  Parle has been growing slighty across the years ,but has fallen sharply in the year 2009 because of the various new entrants in the segment and competitive pricing. Market has got an eye on this segment because of its increasing demands and growth.Market capitalization of the company has also witnessed a huge growth .

The Marketing Strength The extensive distribution network, built over the years, is a major strength for Parle Products. Parle biscuits & sweets are available to consumers, even in the most remote places and in the smallest of villages with a population of just 500.Parle has nearly 1,500 wholesalers, catering to 4,25,000 retail outlets directly or indirectly. A two hundred strong dedicated field force services these wholesalers & retailers. Additionally, there are 31 depots and C&F agents supplying goods to the wide distribution network.The Parle marketing philosophy emphasizes catering to the masses. They constantly endeavour at designing products that provide nutrition & fun to the common man. Most Parle offerings are in the low & mid-range price segments. This is based on their cultivated understanding of the Indian consumer psyche. The value-for-money positioning helps generate large sales volumes for the products.However, Parle Products also manufactures a variety o f premium products for the up-market, urban co nsumers. And in this way, caters a range of products to a variety of consumers.

PRIYA GOLD BISCUITS TOUGH cookie. The term sits well on the shoulders of Shekhar Agarwal,Director of the Rs 150 crore, Delhi-based Surya Food & Agro Ltd, the company behind the Priyagold brand of biscuits. Unfazed by the muscle of big-ticket competitors such as Britannia and Parle, Agarwal modestly tells Catalyst that the reactive strategies adopted by his competitors speak for themselves. A decade of being in the business has got Priyagold the perception of being a brand name to reckon with in the Northern region, a distribution network that has helped the brand chart its way in Western India as well, and recognition for quality production from Surya Food & Agro's manufacturing plant at Surajpur (Greater Noida) in Uttar Pradesh. And while all these factors have played significant roles in getting Priyagold where it is today, is its competitive pricing that remains his brand's main strength.A fact acknowledged by FMCG analysts. "It is a matter of concern that regional players such as Priyagold offer products at retail prices that are almost half that of established players such as Britannia. The product offerings from such regional players may not necessarily be innovative on taste, but are priced very aggressively and do not compromise on quality," observes an FMCG analyst. Some of Britannia's products such as Marie,Good Day and Milk Bikis, for example, have been the victims of this strategy, registering some decline in market share in recent months, according to an AC Nielsen report.This trend is highlighted more in semi-urban and rural markets, known to occupy a significant share of the overall Rs 3,000-crore domestic biscuit market. In fact, close to 70 per cent of Priyagold's sales are accounted for by semi-urban rural markets, and the skew is expected to continue in favour of these markets.

On the other hand, intensified competition from regional players has led the established Britannia and Parle to squeeze their profit margins, offerproducts at various price points, introduce small pack sizes, and offer aggressive marketing promotions. And even as the battle royale continues between Britannia and Parle on a national level, Surya Agro now claims market leadership in the non-glucose biscuit segment, which, according to industry estimates, accounts for 30 per cent of  the overall biscuits market.For all practical purposes then, Priyagold is hot property, especially for first time entrants in the biscuits category. Surya Food & Agro has been approached several times by FMCG multinationals, with proposals of either acquiring the Priyagold brand, or forging strategic alliances with the company. It is very difficult for any company to enter the domestic biscuits market .First, consider the competition. Britannia and Parle are very aggressive nationally, in the East Priya Biscuits is tough competition for any new player, while Duke is strong in the South. Then, of course, there is Priyagold. Yet another player is Bakeman's. The second reason is that margins have to be incurred at dealer, distributor and stockist levels. Then there are other factors such as large investments involved in manufacturing and brand building. It makes it easier for any company wanting to enter this segment ,therefore, to buy out an existing brand. Recent times have thrown up examples of several established FMCG players going slow on biscuits. Kellogg's recently stopped active production of biscuits, Dabur has ruled out an entry and Nestle SA sold off the assets of Excelsia Foods some months ago. There has been talk of  Hindustan Lever, too, extending its Modern brand to biscuits, but nothing has been announced yet. Surya Food & Agro, meanwhile, appears to be going full steam ahead. The company now proposes to take on Britannia on its own turf. Their strongholds are Uttar Pradesh, Punjab and Haryana, but they plan to foray into the Southern market by the end of the current calendar year, beginning with Karnataka. Surya Food intends to subsequently set up a manufacturing unit in the State. Up North, plans to set up a fresh manufacturing facility in Greater Noida next financial year are currently being finalised. The proposed investment in this plant will be about Rs 20 crore,. Production in full swing is expected to begin by the end of this month at the company's third manufacturing base, in Lucknow. The Lucknow plant, set up on an investment of Rs 5 crore, commenced production about two months ago. Consolidation of production is obviously a significant strategy for the company now, with its existing manufacturing bases in Surajpur with seven biscuit lines and Faizabad, a franchisee unit, in place. On the product front, 23 varieties of  biscuits are currently being produced by the company, and there is a plan to foray into salty biscuits next year. In the current fiscal, meanwhile, expect more of last year's  Hak se mango advertising, complete with its small-town appeal. Surya Food plans to hike its consolidated ad spend to Rs 8 crore this

fiscal, against the Rs 5 crore spent on advertising last year On the exports front, the company plans to take its Priyagold brand to markets such as Dubai, Muscat and Oman. The Priyagold story, which began in late 1993 as a family business led by entrepreneur B. P. Agarwal on an investment of Rs 1.5 crore, doesn't seem to be playing second fiddle to anyone. With a target of  doubling sales turnover to Rs 300 crore in the current fiscal, the cookie certainly isn't crumbling for Priyagold.

Other prominent players:

Biscuits

CRTICAL ANALYSIS OF ITC‟S BISCUITS

ITC BRANDED BISCUITS Continuing its pursuit to expand into other segments to reduce dependence on the core business of cigarettes, ITC's foods division launched the `Sunfeast' range of high quality biscuits with offerings in Glucose, Marie and Cream segments after 12 months of product research and development and extensive sampling across 14,000 consumers across all POP group nationally. It was launched nationally in phases in over One million retail outlets across the country.

They believe that their understanding of the Indian consumer is reflected in the increasing confidence in the ITC brand and more importantly the trust that Indian consumers are reposing in all their products. The company however, outsourced the entire production from two units at Burdwan and Nagpur instead of setting up its own manufacturing line. The current capacity of the Burdwan unit is 700 tonnes a month. They want to emerge as the third largest player in the organised biscuit market after Britannia and Parle in the next three to four years with a market share of 10-11 per cent of  the organised market. It was hoped that the turnover of the foods division would jump to Rs. 450-500 crores in the next four years with biscuits alone contributing close to Rs. 150-200 crores. They are also looking at two more outsourcing arrangements in Western and Southern India considering that the value added range market was growing at 10 per cent annually.The Sunfeast range is competitively priced and includes two new product innovatio ns  — orange flavoured Marie and Butterscotch flavoured cream biscuits launched for the first time in the Indian market.

'Sunfeast Biscuits' – Offerings Sunfeast Glucose Biscuits deliver the Natural Goodness of Wheat and is availab le in 100 gms, 75 gms and 19 gms priced at Rs. 4, Rs. 3 and Re 1 respectively, targeting children between the age group 4 – 14 years and their mothers. Sunfeast Orange Marie  – a very differentiated offering is available in 200 gms, priced at Rs. 13 and 'Sunfeast Marie Light'  – Light & Crispy, available in 200 gms and 400 gms, priced at Rs. 13 and Rs. 24 respectively. Targeting housewives. Sunfeast Orange Cream, Sunfeast Butterscotch Cream & Sunfeast Bourbon Cream – Smooth & Yummy Cream Biscuits, available in 100 gms, priced at Rs. 11, Rs. 11 and Rs. 12 respectively. Targeting childre n between the age group 4 – 14 years. The launch of ―Sunfeast‖ marked ITC Foods entry into the branded biscuit market with a range of offerings in both basic and value added segments 'Sunfeast', with the Brand Essence ―Spread the Smile,‖ connotes happiness, contentment, satisfaction and pleasure one would derive from the biscuits. The brand positioning and imagery is reinforced by the Sun mascot conveying the emotional and gratifying aspects of the product. This latest offering from ITC Foods is in tune with the company‘s strategic direction to develop new product lines by synergising its proven competencies. The entire range of 'Sunfeast Biscuits' is packed in vibrant colours, distinctive graphics and fonts identifying sub categories and at the same time, maintaining a consistent look of the umbrella brand ―Sunfeast‖. The brand is supported with Television campaigns across National and Vernacular media  – that is distinct,

highlighting the product attributes, quality and the new – first time in the market offerings from Sunfeast. During the launch phase, Consumer promotions were conducted across retail outlets.

ITC TASTES SUCCESS IN BISCUITS The company's success in the food products business is attributed to the depth in its distribution network, ability in brand building and in identifying quality outsourcing opportunities. THOUGH the ITC brand is almost synonymous with tobacco, it has in no way weighed with the people purchasing products of ITC's Foods division and the company has been able to capture nearly 10 per cent of the market share for biscuits within a year of the launch of `Sunfeast' range of biscuits. The biscuits market, which witnessed a growth of 12 per cent during last year in the country, is expected to sustain its growth during the current year, too. The biscuits market in the country was estimated to be worth Rs 4,500 crore annually and in terms of quantity it was around 5.12 lakh tonnes. While the organised, branded segment had a 60 per cent market share the rest was accounted for by the unorganised sector. Maharashtra and Uttar Pradesh were two of the largest markets for biscuits and Tamil Nadu, with 9 per cent market share, was ranked third. ITC Foods division launched biscuits in three segments - Glucose, Marie and Cream - and it was the first to come out with two new flavours  – Orange Marie and Butterscotch Cream biscuits. While in the rural markets Glucose biscuits do well, in the urban markets it is the cream biscuits segment. ITC clearly demarcated its two businesses and food products were sold through groceries/departmental stores that did not deal in tobacco products. Hence there was no hesitation on the part of the consumers to accept biscuits, ready-to-eat food products and chocolates marketed by ITC through its Foods Division despite the fact that ITC as a brand has long been associated with tobacco. The company's success in the food products business is due to the depth in its distribution network, ability in brand building and in identifying quality outsourcing opportunities. ITC entered the biscuits market in August 2003 and it has introduced its products in Uttar Pradesh, Maharashtra, Kerala, etc. The `Sunfeast' brand of biscuits have been able to capture a 10 per cent market share where they have been launched. In Coimbatore, by the end of 2004-05, it would garner 20 per cent of the biscuit market. The market for biscuits is to be good since the per capita

consumption of biscuits was just about 10 kg in India where was it was 100 kg in countries like the US and even China. Moreover, from being essentially a favourite of children , biscuits are emerging as a preferred snacks to be consumed with coffee or tea and this wider consumer choice promised growing demand for them. ITC expects maximum sale of biscuits in west India which will cater to around 29 per cent of the company‘s total biscuits sales. The share of east and south will be somewhat similar at around 23 percent .During the current financial year, the company‘s food division will concentrate mainly on strengthening of its distribution network. They are looking at sales or profit right at this moment. Their primary aim now is to make their products available in all corners of the country. The company has no plans to go for export of biscuits in a big way immediately.

Key Products : Sunfeast Milky Magic ,Sunfeast Marie Light ,Sunfeast Golden Bakery ,Sunfeast Dark Fantasy ,Sunfeast Dream Cream ,Sunfeast Snacky ,Sunfeast sweet 'n salt ,Sunfeast Nice ,Sunfeast Benne Vita Flaxseed Biscuits ,Sunfeast Special

DISTRIBUTION NETWORK OF ITC

MOVE over supermarkets, departmental stores. The friendly neighbourhood  panwallah play a major role in the corporate sector what with ITC Ltd‘s food division banks on this segment to give it the winning edge in the war to win the loyalty of Indian palates.ITC leveraged its proven strength in retailing especially through the  panwallah segment with which it is particularly familiar, thanks to its cigarette business, to emerge as a leading player in the branded biscuits market which it entered barely over month ago. While grocery stores remained a large part of the retail rollout plan, growth for them came from the neighbourhood convenience stores and panwallahs who are familiar with company and brands. The biscuits are now available cross the country through such outlets. While making inroads into retail has remained a tough challenge for many MNCs, ITC seems to have cracked the complicated code if you consider the fact that in a place like Pune, for example- it services four thousand such outlets on a daily basis with the figure increasing to over two-and-a-half lakh across the State. The company has already set in motion a multi-crore brand-building and promotion exercise for its foray into the biscuits business. At stake is a Rs 2,700-crore organised market for the product, which is currently dominated by Britannia and Parle, which currently account for over 80 per cent of the market. The company‘s brand strategy seems to be based on giving established favourites like Marie and cream biscuit segment a new interpretation to seduce palates. Thus, while the Marie takes on a new, orange flavoured avatar, the company is hoping to lure Indian biscuit lovers with an all-new butterscotch cream avatar for the latter, under its ‗Sunfeast‘.

Flavour innovation will lead growth in the cream segment and we willcontinually look at launching value-added products to gain leadership position .Whether the panwallah will smoothen the journey to number one position remains to be seen but the company is already claiming that it has got 4-5per cent of the 600-700 tonnes/month Mumbai market just one month into the launch.The company is already launching the product across various cities and plans to make the brand a national one in the next few months. That is also planning to offer trade margins that will give competition a run for its money will, no doubt, help.It also continues to build its IT-backed rural distributio n infrastructure in support of its FMCG growth strategy because the distribution reach of this ebiz is more important than its revenue  – earning potential. This is important for India because distribution of products and services to the hinterlands of  India is a daunting task, and this is the bit that most FMCGs as well as the cola majors are struggling with.

VIEW OF INDIAN BISCUIT INDUSTRYIt is now a booming market because it is not restricted to small children but also to aged   person.The increase in purchasing power of buyers have bound them to change the company‘s strategies. There is a signi ficant difference between preferences of biscuits among different customers  according to taste, quantity purchased, income, family size and age group.

RECOMMENDATIONS FOR THE INDIAN BISCUIT INDUSTRYA good pricing strategy must be adopted Necessary product differentiation required Quality should be enhanced There must be more quality variants of the weaker companies in the market Try to adopt competitor‘s strategies at times, whenever required The number of effective advertisement should be increased Health oriented biscuits should be introduced. CHIPS MARKET OF INDIAPotato Wafers and Chips

General Overview

In India around 12 million tonnes of potato is grown which is about 4% of the total world production. However, the per capita consumption of potatoes is low. Potato is probably the most popular food item in the Indian diet. It is grown all over the country with Uttar Pradesh growing the maximum quantity. Potato is a very rich source of starch. It also contains phosphorus, calcium, iron and some vitamins. It is estimated that 25% of the potatoes, which are spoiled due to various reasons such as transportation, type of packing, nonavailability of cold storage capacities during harvesting season, glut in the market etc., could be saved by making various preserved potato products. Potato wafers and chips are one such products. Potato wafers and chips are thin slices of potato, fried quickly in oil and then salted A Brief History of Potato Wafers and Chips

According to snack food folklore, the potato chips and the wafers were the fanciful creation of a certain chef called George Crum. He apparently invented it in 1853 in his restaurant - Moon's Lake House in Saratoga Spring, New York. The urban legend goes like this that George Crum was angered when a customer returned his french fried potatoes to the kitchen for being too thick, Crum shaved them paper thin and sent the plate back out. And thus came it being the Potato Chips and Wafers. Market Potential of Potato Wafers and Chips Potato Wafers and Chips are one of the most celebrated in the Ready To Eat munchies market, relished in almost all the parts of the world. In India it is being produced not only on large scale by big firms, but also on cottage/home scale in semi-urban and rural areas. Owing to this, there is a number of companies from both the organized as well as unorganized sector who are already catering to the needs of tea stalls, restaurants, railway stations, tourist places etc. Still there is a huge demand to be met for these products in interior and remote places in different parts of the country.

There exists consumer as well as bulk markets for potato wafers and chips even in far flung rural areas owing primarily to the following reasons:    

Rapid urbanisation and improving standards of living Easy availability Convenient packaging Affordable prices Nutritious values

Though there exists some international as well as national brands but majority of the market base is under the control of local manufacturers. With proper strategy and network, it is possible to penetrate the market. Potato chips show no sign of declining in popularity. However, the public's increased demand for low-fat foods has put manufacturers on a fast track to produce a reduced -calorie chip that pleases the palate as well. Equipments Use d In The Production Proce ss

For the production of good quality chips, the potatoes should have less sugar content. Whenever, cold stored potatoes are to be used for chips making, those potatoes should be brought to the room temperature and be used only after 24-48 hours. The equipments and gadgets used for the above processing are easily availab le locally and they include potato slicer, peeler, blancher made of aluminium or stainless steel, dehydrator, deep fat frier, basket sieve, pouch sealing machine and weighing scale.

The Manufacturing Process

The simplest chips of the kind that are just cooked and salted, but manufacturers can add a wide variety of seasonings of herbs, spices, cheese or artificial additives. Potato wafers must be manufactured in a scientific manner and under hygienic conditions. The production process mainly comprises of the following steps:Washing and Peeling - Fully grown and ripe potatoes are firstly

thoroughly washed before peeling them with the help of a peeler. Then these potatoes are trimmed and put in brine water for 30-35 minutes to prevent browning

Slicing and Blanching - Afterwards they are cut in the required sizes on slicing machine. These

slices are blanched in boiling water Drying and Frying - Then the blanched potatoes are placed on drying trays which are then put

in the drying machine. Temperature of dryer is maintained in the range of 140 to 150O F. After drying, they are fried in edible oil to make them crisp and brown. Packaging - The fried potato wafers are then kept on the sieve to remove excess of oil, cooled

and other ingredients like salts, spicy mixture is sprayed as per required taste. Cooled potato wafers are then packed in polythene bag.

Quality Control Process

Preventing breakage must be a primary goal of the producer and to ensure minimum breakage companies should install safeguards at various points of the production process The color is compared to charts that show acceptable chip colors across the processed food industry norms The quality inspectors should also check the chips for salt, seasoning, moisture, color, and overall flavor. Popular Flavors of Potato Wafers and Chips

Over the years potato wafers and chips have continued to evolved, with a steady increase in kinds of flavors. Few of the most popular flavors across the world are as follows:1. Plain 2. Ready Salted 3. Salt and Pepper 4. Salt and Vinegar 5. Worcestershire Sauce 6. Tomato Sauce (ketchup flavor) 7. Sour Cream and Onion 8. Barbecue 9. Kimchi 10. Garlic 11. Chili 12. Chicken. Global Perspective for Potato Wafers and Chips

The rise of the 'snacking' phenomenon is now fairly well documented on an international scale, although the rate and extent of development do vary from country to country. With the

breakdown of formal meals, consumers are increasingly tending to eat a number of smaller snacks during the day rather than three full meals. Furthermore, in an increasingly fast paced financially well-off society there is growing demand for snacks that are easy to buy, store and eat, with an increasing number being eaten 'on the move'. With this background, the potato wafers and chips market seems to hold good growth prospects. According snack market analysis, potato chips account for an average of 35% of the total savory snacks market. Wish Chip

A wish chip is any potato wafer or chip that has somehow become folded in half during the production process. It is so believed by some in different parts of the world that if you make a wish while having such a half folded wafer then it is granted. The ritual involves of fitting the whole chip in one's mouth and then chewing it either before, after or while the wish is made, the timing and manner in which the wish is made is highly variable and changes from region to region.

INTRODUCTION OF LAYS:

Frito-Lay North America (FLNA) is a division of PepsiCo, Inc. which manufactures, markets and sells a variety of corn chips, potato chips and other snack foods. FLNA is headquartered in Plano, Texas, a suburb of Dallas. The company's current form is the result of a 1965 merger of Frito-Lay, Inc. and the Pepsi-Cola Company, which resulted in the formation of PepsiCo, Inc. Products sold under the Frito-Lay name are now recorded by two PepsiCo divisions: Frito-Lay North America (North American sales) and PepsiCo International (international sales)

Lay‟s - Be a Little Dillogica

Brand History Lay‟s - world‟s largest and favo rite snack food brand, has also steadily established itself as an indispensable part of the “snacking culture” in India since its launch in 1995. Lay‘s, with its irresistible tastes, international & Indian flavors and young imagery has established itself as a youth brand and continues to grow in the hearts and mind of its consumer! Over the years, Lay's has been known for its engaging & innovative promotions and campaigns. The brand known for its "No one can eat just once " campaign has moved it's positioning to "what's the program? " making Lay's - the main food of every program! Saif Ali Khan, has been the face of the brand for over 5 years. He has recently been joined by the captain of the Indian Cricket Team M.S Dhoni - both embodying the youthful appeal and energy of the brand. In 2008, Lay's launched a never before "Fight for your Flavor" allowing consumers vote for the flavor of their choice and the flavor with the maximum votes continues in the market. The flavors have been se lected by the Lay's brand ambassadors - Saif Ali Khan and M S Dhoni - with each celebrity rooting for the flavor of their choice. In Nov 2008, Lay's Chip-n-Sauce pack is yet another breakthrough innovation by the Lays. The pack has been launched for cricket lovers to savor the best of the season with this first to market innovation. Lay's Chip-n-Sauce large pack is introduced in two unique flavors Chilli Chinese with Schezwan sauce sachet and Chatpata Indian with Tamarind sauce sachets inside the pack. In June 2009, Lay's launched its new positioning platform - Lay's be a little Dillogical. The new Dillogical concept makes a strong connect with youth caught in the divergent pressures of the desire to succeed and the desire to stay actively engaged with those life filling moments. This friction is like a game between the heart and the head, a struggle between what you wish to do versus what you have to do. It is all about making things that matter to the heart, happen. In 2006, Lay's launched the first pre mium irresistible c risp, Lay's Stax. These perfectly shaped bite-sized crisps come in 6 irresistible, international flavors. These crisps are stacked in

shareable tray, in a trendy can! Lay's Stax caters to the tastes of the Global Indian citizen, who has an evolved palate. But don't just take our word for it - go grab your Stax now!

. KURKURE-

Kurkure - Tedha Hai Par Mera Hai Brand History Launched in 1999 , this perfect 'namkeen' snack, fully developed in India, has become the torch

bearer of fun and lovable human quirks. It developed an even stronger identity through celebrity associations with Juhi Chawla [2003] and Kareena Kapoor [2008], well-known actors in Indian Cinema.

About the Brand Brand Promise Kurkure is a crunchy new age namkeen snack brand which symbolizes light hearted fun. Embodying the spirit of India, Kurkure has found a home in the hearts & minds of all and e njoys the position of a strong Lovemark brand in India. The spirit and twinkle of Juhi's personality complements and embodies what Kurkure stands for. Over the years, Kurkure has journeyed effortlessly from being a snack with a twist to being an integral part of the tea time menu to being an embodiment of lovable human 'imperfections' or 'tedhapan'.

Brand Advantage

Cooked in RBO (Rice Bran Oil), Kurkure has 40% less Saturated Fat, Zero Trans Fats and No Added MSG. All the raw materials used in Kurkure comply with the Prevention of Food Adulteration Act and Rules that govern the manufacture, distribution and sale of  Kurkure. All ingredients are such that are used daily in all households today for preparation of various edible items.

Innovations Kurkure has constantly re-invented to keep itself relevant to the Indian ethos and culture. Not only has Kurkure provided an inimitable taste and superior quality, but it has also strived to do more for its consumers. It has brought fame and joy to many through its 'Chai-time-achievers' face on pack initiative. Kurkure continues to associate itself with Indian families and has launched a new engagement program around ―spending time with families‖ this year. From an innovation standpoint, Kurkure has launched an ingredient innovation with the launch of  Kurkure made with Rajma in 2010.

Kurkure Desi Beats Kurkure Desi Beats is an exciting new range of crunchy snacks offering irresistible Indian tastes using authentic Indian ingredients like corn and wheat. This sub-brand personifies the inherent ‗Desi‘ (Indian) spirit in all of us. Kurkure Desi Beats celebrates the contemporary Indian youth who straddles both tradition and modernity and is confident in his Indian identity. The sub-brand has recently launched two new flavours in a new rectangular shape.

Quality Standards Kurkure is made in automated plants in three locations. These are in Channo (Punjab), Kolkata and Pune. These plants are also audited and certified by various external agencies. These certifications include: A .HACCP (Hazard analysis and critical control point) B .Certification by TQCSI (Australia) , which confirms that products are manufactured in Food safety environme nt and manufacturing has adequate controls to ensure product tracking. C .American Institute of Baking (USA) , one of the best auditing body which confirms process and product safety. D .Our Plants are ISO 14000 certified which confirms that the manufacturing process ensures environmental safety.

E .Our plants are also certified to ensure that the product, process, environme nt and people safety have been maintained at very high level and this certificatio n is issued by OHSAS 18001(Occupational Health and Safety Assessment Series) - (USA).

QUICK BRAND FACTS 

Launched in India in 1999.



Kurkure Desi Beats; an exciting new range.



Kurkure has 40% less Saturated Fat, Zero Trans Fats and no added MSG .

Haldiram : EVOLUTION :

EVOLUTION 1937  – Bikaner 3 units till 90s – Kolkatta, Nagpur & New Delhi. First Mover Advantage  – Branded Namkeens & Technology in Packing. Traditional Indian Food – Hygiene & Quality Competitors  – Unorganized market, Frito Lays India, SM foods, Bakemans, etc.

STRENGTHS AS BRAND : STRENGTHS AS BRAND First Mover Advantage Product Quality & Hygiene Value for Money Products Rich Cultural Heritage  – Exchange of Gifts Strong Distribution Network  Hoardings for Promotion For all Age Groups Various Awards of Recognition

MARKET STRUCTURE : MARKET STRUCTURE SUBSTITUTE PRODUCTS Potato C hips Biscuits Fast Food & Sweet Shops Popcorns & Peanuts Home Made Preparations INDUSTRY COMPETITORS Pepsi Foods & Frito Lays Bakeman‘s Nathu‘s Evergreen‘s SM Foods Britannia Unorganised Players SUPPLIERS Farmers Manufacturers Units Other Vendors C&F Agents Distributors Semi Wholesaler Retail Shops & Paanwalas BUYERS Corporate Offices Households Restaurants &

Eateries Canteens & Factories POTENTIAL ENTRANTS Existing Industry Competitors Small Regional Players International Players

PRODUCT : PRODUCT Scope  –  Exhaustive Range of RTE Products Attributes / Benefits Packaging for longer shelf life & freshness Various price points & reasonable State of art manufacturing technology Easy availability Quality / Value  –  Good quality at competitive prices Uses  –  Filler between meals For serving to guests

BRAND : BRAND Users  –  Gourmets having inclinatio n towards Indian meals Country of Origin  – Bikaner Organization Associations  – Innovative & High quality products Brand Personality  – ―Maharaj‖ known for lip-smacking dishes Symbol  – Written in golden for richness & purity Brand Customer relationship  – Indian taste at anytime Emotional Benefits  – Smart purchase of high quality & hygienic products

BRAND IDENTITY SYSTEM : BRAND IDENTITY SYSTEM Value Proposition  – Functional Benefits  – Taste, Hygiene, Consistent Quality, Best Packaging, Freshness, Extensive Product Range Emotional Benefits  –  Smart Buyer, Association with Indian Roots Credibility  – Makes Ready-To-Eat that are tasty and hygienic

BRAND PERSONALITY : BRAND PERSONALITY ―Maharaj‖ known for lip-smack ing dishes Male of 40 yrs old of  middle or upper middle class A person found of food, jolly, old-fashioned, down-to-earth, honest, wholesome, real and authentic Image of sincere, experienced, skilled genuine and older brand Well liked and respected member of the family High quality & rich parentage

POSITIONING :

POSITIONING To the consumers having inclination towards Indian meals, Haldiram‘s offers ready to eat high quality readily available Indian snacks, with excellent packaging which provides increased shelf life to its products.

Sales Organization Structure : outlets of Haldiram‘s give importance to POP displays.

HALDIRAM‟S ABROAD : HALDIRAM‘S ABROAD Exporting to USA, UK, Australia, Middle East & Far East Countries, Germany, Philippines, New Zealand, Nepal, etc. Success over geographical boundaries hygienically prepared Indian cuisine :Opening of restaurants abroad Ethnicity angle in the marketing efforts differentiated Haldiram‘s and enabled it to sustain itself from threat of  McDonald‘s and Pizza Hut.

SUPPLY CHAIN OF HALDIRAM‟S : SUPPLY CHAIN OF HALDIRAM‘S Manufacturing unit C&F Agents Distributors Retailers Consumers. 50 C&F agents and 1035 distributors in India Retail outlets such as supermarkets, sweet shops, provision stores (Goodwill : Pull strategy : Stockists Compete to hold the brand) Tie up with www.indiatimes.co m with delivery time of 48 hours to one week and value added services (personal messages)

SWOT Analysis of Haldiram : Future Expansion : Future Expansion To increase exports. To increase the existing strong distribution network. To come up with IPO to fund its diversification and expansion plan. To launch egg-less bakery items.

Suggestions : Suggestions Diversifying into new innovative products Increase the no. of outlets Better promotion Home Delivery Explore the possibility of opening the outlets in foreign market Customer service

ITC Foods Launches  Bingo

Bingo! :: Snack foods

The launch of Bingo! in March 2007 marked ITC's foray into the fast growing branded snack foods segment. Bingo‘s portfolio includes an array of products in both Potato Chips & Finger Snacks segment. Bingo! is positioned as a youthful and innovative snack, offering the consumers a choice of  flavours that are fast becoming popular.

The Potato Chips offerings comprise the ever-popular Salted, Masala and Tomato flavours, as well as some innovative variants inspired by the snacking habits of different parts of the country like Chatkila Nimbu Achaar.

Bingo!  – International Cream & Onion is the brand‘s latest addition to its existing unique and exciting range. Keeping in sync with the Bingo! philosophy, this variant brings with it a unique combination of cheese, cream and spring onions, giving it a truly international flavour.

The Finger Snacks segment, the innovative 'khakra inspired' Mad Angles has become an instant hit among consumers and is available in 3 flavours - Tomato Mischief , Chilli Dhamaka and Achaari Masti.

Finger Snack  „Hatke Jhatke‟, appropriately shaped like a wave, takes Bingo!‘s philosophy of ‗combinations‘ forward with two exciting flavours - Funky Masala & Tomato Twist.

Marketing Objective

Initial offerings: 

Potato Chips Finger Snacks segment

Potato Chips Variants:- (Habits of different parts of the country)  

Masala Flavours Salted Flavours

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Tomato Flavours

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South inspired

Finger Snacks offerings:- (Unique & Innovative)   

Pakoda inspired Live Wires Khakra inspired Mad Angles Tedhe Medhe

MARKETING OBJECTIVE 

Target is placement of all merchandising units across the market in a months time

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Create Identity in a Short Span Offering a wide range Reach every nook & corner

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Distinct Approach ( Innovative & Differentiated products)

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BINGO GROWTH STAGE

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Eaten up Market Share of Lays in 9 months 16% market share @ Snack market Now aiming for 25% Lays share reduce from 65% to 45%

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High Decibel Advertising Novelty Factor Regional Flavors

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Distribution Strength

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Market Share 2010 5% 13% 32%

Lays Kurkure Bingo

23%

Haldiram Others

27%

INTERPRETATION-

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It can be seen that in the chips market in India ,the largest share belongs to lays(32%). Kurkure snack also has a good market share ,its spicy taste is being cherished by the consumers thereby giving it good growth in its market share.

TRENDSITC Bingo: According to a study by McKinsey & Co, the Indian food market will grow two fold by 2025 with the rapidly growing Indian economy and improving lifestyles of Indians contributing in a big way to this growth. Quoting the study by McKinsey & Co, a report by the US Department of  Agriculture stated "The market size for the food consumption category in India is expected to

grow from US$ 155 billion in 2005 to US$ 344 billion in 2025 at a compound annual growth rate of 4.1 per cent." "Consumers are willing to pay a premium for both value-added private and branded products, creating immense opportunities for manufacturers and retailers,' the report stated.Potato chips and potato- based items are the most popular products with more than 85 per cent share of the salty snack market, the report said. In the organized potato chips market, some of the leading players are Pepsi, Haldiram's, ITC, Britannia, Bikano, Balaji, Marico, Dabur etc. Bingo was launched in India on Mar 14, 2007 during the world cup time. Main aim of ITC Bingo advertisements was to create buzz among customers. Most of the advertisements of Bingo were considered vague and stupid but I feel that was the best form of communication any marketing company has ever done. Within a month of launch of initial advertisements, 70% of the viewers could recall the brand and that was their main aim. Brand recall along with 16 flavors in three SKUs helped ITC to capture 16% of market share in just 18 months of Bingo chips, though it is very early to say that whether ITC could sustain such a growth in long term with so many flavors. The major problem with so many flavors is that if a person does not like any of the flavor, he will not even try other flavors. So much diversification might come in the path of ITC‘s growth in snacks business. The segmentation was mainly done on basis of the age of the people. The primary target for Bingo is 18-30 year old people, who are willing to try out new flavours more easily than the small kids. Bingo is positioned as a youthful and innovative snack.In a survey done by ITC, it has been found that 70% of respondents liked Indian flavors like bhel, golgappas etc. Initial pricing of ITC bingo is directly frontal attack on Frito lays with pricing of Rs 5,10 and 20. Now Frito Lays has launched small packs of Rs 3. Let us see whether ITC can leverage upon its huge distribution network covering panwaalas to small kiryana shops with a similar small pack of Rs 3.The Company distributed more than 4 lakh large racks, to display the brand at all points of  sale. The racks created so much impact that even competitors like market leader Frito-Lay's introduced its own version of wafer racks. Within six months of launch Bingo was available in more than 2, 50, 000 retailers across the country. ITC with bingo adopted a Market Challenger strategy and chose a combination of flank and frontal attack against the market leader Frito Lay‘s. With the rise of ITC bingo in no time, Lays has revamped its branding strategy with new promotions featuring actress like Juhi Chawla, Kareena Kapoor etc. About 35 AC BEST buses in Mumbai and metro in Kolkata are now branded by Kurkure.Frito Lays again launched a new consumer promotion campaign, Chai Time Achievers campaign in which consumers could send their recipes using Kurkure. Now with the growth of ITC Bingo, Lays has launched Indian flavors like Lay‘s chat street, India‘s Mint Mischief, Wafer Style etc.

Ravi Naware, chief executive officer of ITC Foods said, ―We are getting ready to launch a media-  blitz for ‗Bingo‘ next month. We forayed into this sector in March 2007 and our market share today stands at 23 %. Our goal is to capture a 50 % share in this sector.‖

As of now Indian snack industry is about 2500 crore. Frito Lays has 59%, Haldiram has 13% market share and ITC bingo has 23% share. Rest of the market is dominated by few regional players like Balaji. It seems to be very difficult goal. There seems to be potential problems like huge competition by Frito Lays and Haldiram. Players like Balaji might expand into national terrotiry or it could be bought over by players like Lays. The other major threat could be preference of people toward healthy snacks. The snack food industry in India is highly fragmented, with the market dominated by made-athome snacks or savories sold by local vendors. Because of expanding nuclear families and an increase in the number of female professionals, India has witnessed a significant rise in the demand for ready-to-eat snacks. ―Today, Indian consumers [want] snack foods that are portable, hygienic and a ready substitute for hot snacks,‖ comments Sujit Das Munshi, executive director of AC Nielsen South Asia. Snacks like biscuits and potato wafers and Indian savories like laccha (fried potato sticks) were already available in the packaged format, but Frito Lay India (a subsidiary of PepsiCo) decided to find a niche in the market, by offering a product with a unique shape and taste. In 1999, the company (already in the market with its flagship brand Lay‘s) launched Kurkure ("Crunchy" in Hindi) in the Indian market. Since its inception, this strangely addictive snack has been a huge success among Indian consumers, with recent plans to take this locally developed snack food brand global. While a soft launch has already been made, with the brand available at Indian grocery stores in the US and UK, a large scale launch is on the agenda. As Indra Nooyi, CEO of PepsiCo, mentions in an interview to rediff.co m, ―Kurkure will retain its basic Indian flavor [in its overseas journey], but will be tweaked a bit [in areas like seasonings] to suit the palate of international consumers.‖ ―Flavor innovations, affordable price points and an excellent customer connect through a 360 degree communication approach has helped the brand enjoy iconic brand salience in the snacks category,‖ observes an industry analyst.

The advertising campaign spoofed popular Indian TV shows like Jassi Jaissi Koi Nahin (Indian adaptation of American sitcom "Ugly Betty") to appeal to Indian housewives, the largest target audience to watch these programs. In addition to targeting housewives, who play a significant role in making purchase decisions, Apart from traditional "unbranded " snack brands, Indian consumers today have a variety of  "branded" savories to choose from. While Frito Lay, with a market share of 59 % percent (US $550 million), dominates the branded snacks market with its Kurkure and Lays brand, there are a

host of other players. Haldirams, for example, and newer entrants like Amul‘s Munch Time and ITC‘s Bingo, are scrambling for a share of the snack pie. In this overcrowded market, if Kurkure continues to tickle consumer taste buds with new innovations, there‘s no reason for consumers to stop munching Multinational snack maker FritoLay has Indianised its potato chips brand Lay‘s in the wake of competition by new entrants like ITC‘s Bingo. . Although, FritoLay India leads the market with a share of59 per cent, it has lost over 10 per cent share in the Rs 2,000 crore  branded snacks market this year. Haldiram‘s and ITC have a market share of 13 and 23 per cent, respectively.

MARKET LEADERS: Frito-Lay's is the market leader with a 59 % market share, followed by Bingo with 23%. The balance market is divided among small local players.

TARGET AUDIENCE: Generally Potato Chips are targeted towards all age groups differentiated in taste. For e.g. Premium Chips (Normal salty chips) are targeted towards Kids & Old age group due to their softness, even further it is more specifically targeted based on taste, like Premium Salted is targeted towards kids and Both Premium salted / Spicy are targeted toward all age groups.

PACKAGING: Leading players try to woo consumers with attractive packaging and designs. Generally all branded companies uses the technology of packing the product with nitrogen filled aluminum vacuumed pouches, which help to keep the product fresh for a longer shelf life, but also increases the cost. Smaller manufacturers like Garden Foods, Raghuvanshi Exports, Janta etc use Polly Propane plastic pouches for packaging the products. The pouches are pre-printed with Company Name, Brand Name, Product Name, Ingredients, Mfg. Date & Best Before Date. MRP is then stamped by a machine before packing the products.Generally these packs are provided to the retailers in a series (Lar Form) with a hanging stand. When the products are to be distributed outside the country or in a bulk then the pouches are packed in Boxes with Company Name, Item Name & Brand Name printed on it.

COSTING & PRICING: Raw material and packaging are the two major cost components. The organized players follow rigorous quality control of raw material and maintain high hygiene standards at their manufacturing facilities. This results in a much higher cost of production, thereby making them price uncompetetive in comparison to there small scale unorganized counterparts.

Packaging is a major cost, accounting for half the price of the product. Normal Polly propane plastic bags costs on an average Rs.2 per pack whereas the aluminum packs costs around Rs.2 to Rs.4.5 approximately based on size. The Boxes cost around RS.5 (Minimum) to Rs.32 (Maximum) based on size and quality.Generally manufacturing companies have a profit margin of around 20% to 25%. Local Retailers are given 30% to 35% margin whereas in case where the products are distributed through distributors the margin of 30% to 35% is distributed amongst the Distributors, Super Stokers & Retailers. For e.g. A 55gm pack of Frito's-Kurkure is pricing around Rs.10 of which Rs.3 is distributed amongst Distributor s & local Retailers. Out of the remaining Rs.7 Companies profit is around Rs.1.75 to Rs.2. Packaging costs around Rs.2 and distribution and manufacturing costs around Rs.3 to Rs.3.25.

DISTRIBUTION: Distribution is also one of the key parameters for expanding market share. Frito- Lays has the advantage of access to Pepsi's a formidab le distribution network whereas products like Uncle Chipps is retailed through around 600000 outlets across the country.Generally Companies are having their sales vehicles that are loaded on daily basis and are distributed to local retailers. Some companies appoint Distributors. Distributo rs have to give a proposal with a market research like storage facilities, infrastructure, retail outlets in area, market leader, types of  products available in the market etc. In some companies the products are delivered to the retailer twice a week (e.g. Frito India), while in some companies on daily basis (e.g. Garden). The products are generally sent in Boxes on an average each box contains 80 packs of 30 gm or 30 packs of 150 gm. Distributors are solely responsible for the sales in the particular area he is operating in. Every Distributor should have a specified number (varying from company-to-company) of minimum shops in his area. Distributo rs generally have small vans (rickshaws) and employ salesmen on commission basis who loads the products from the distributors storage and distributes it amongst the retailers. Companies nowadays have even started distribution through their websites.

CONSUMER'S PROFILE: Snack foods are impulse purchase products, and there is an element of indulgence associated with them. It does not figure very high on the shopping list. A consumer buys it only if it catches his eye at the outlet or is accompanied by a child who finds potato chips a fun snack. So leading players have stressed on attractive packaging and promotions targeted at children to increase consumption. As these products are general fun eat, brand loyalties are not strong a nd consumers

look for novelty and new flavors. There is no notable difference in consumption pattern across various age groups. Snacks like Wafers & Chevadas are generally preferred for the daily consumption whereas fun- foods like Cheeseballs and Tw istys are sold more in schools, Colleges, Railway Platforms and Movie Theatres. Kids generally prefer Fun-Foods whereas all age groups generally prefer Wafers and other snacks. Taste varies widely across the regions. For instance in South, banana chips are extremely popular which do not find many acceptances in other parts of the country. In east, Paaprichaat is very successful whereas in Mumbai, tomato punch has been a runaway success.

FACTS & FIGURES: 

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The Growth rate of market for Potato Chips is expected to grow by 9.3% by the end 2010. Demand of Potato Chips/ Namkeens is expected to reach 790 thousand Metric Tonnes whereas For Fun-Foods is expected to reach Rs. 50 bn by the end of 2010 . SM Foods has grown from a sales turnover of Rs 5.96 crore in 1993 -94 to Rs 29 crore during 1999-2000. This marks a growth of over 350 per cent over a period of five years, a growth rate of 77 per cent each year. SM Foods has earmarked more money for marketing this year and is spending close to Rs.5 crore on a media blitz. Uncle Chipps a Delhi based food products company has an annual turnover of  Rs600mn. Britannia Industries Ltd has introduced a new range of traditional Namkeens called Britannia Snax in Mumbai. Targeted at the youth segment, the new range includes seven varieties of traditional Namkeens like `Bikaner ki Bhujia' and `Rajas-thani Alu Bhujia'. The new range is priced between Rs 5 and Rs 20.

CONCLUSION & RECOMMANDATION: Snack food industry is quiet a potential market with consumers not being brand loyal there is always a scope for new entrants with new innovative products. Consumers generally like to try some new products emerging in the markets. Due to lack of brand loyalty product reach and availability is most important for increasing the market share, so Distribution channel plays a major role. Companies need to encourage their distributors with some incentives or gifts. Companies should provide proper training on marketing and sales to their Distributors as well as Sales Force.Overall Snack food market is estimated at 350,000 ton, of which the organized market for chips is estimated to be 6500 tons valued at Rs2bn. The market for branded chips has been growing at a fast pace of around 20 per cent. Today the companies are entering more into Namkeens category as there are very few players and the Namkeens are of regional tastes.Indian snack food industry comprises of many Indian as well as MNCs. The Indian snack market reached a value of $307.7 million in 2001. The Indian snacks food market is of the order of 400,000 tones. This wide range of products are categorized under Potato / Banana Chips, Namkeens & Fun-Foods. The organized market for chips is estimated to be 6500 tons valued at Rs.2 bn. The market for branded chips has been growing at a fast pace of around 20-25 % annually Since the majority of MNC's entered their venture in Ready-To-Eat Snacks & Namkeens.. The research was conducted to study the actual buying behavior of the consumers and their preference for such a category of food. Research methodology being exploratory research The Research was a good experience & the final conclusion is that the consumers generally associate Snacks & Namkeens with Time Pass. Majority of them prefers wafers to be their first choice. Namkeens on other hand are usually preferred as hunger quencher and are eaten whenever the consumers are hungry. Overall the industry is grooming and has vast opportunity to be cashed for the manufacture rs.