The hitherto calm biscuit market, which was once a fiefdom of Bri- tannia, closely followed by Parle, has suddenly begun to see the competition heating up. It is no longer Britannia vs. Parle, the two players, which once shared among them over two-thirds of the market share. However, All this began to change when ITC-the tobacco to hospitality to paper giant-decided to take a bite into the Rs. 5,50,000 cr biscuit market in the country. The entry of ITC along with a host of regional players has slowly but surely made a significant dent in Britannia's market share. With its "Sunfeast" brand, ITC has successfully grabbed a big pie in the market. The impact is visible: Within just three years of its inception, Sunfeast has dragged down Britannia's market share from a whopping 46% in 2003 to 31.3% as of March 2006, in terms of volume.
Whereas the "still young" brand Sunfeast has garnered a 8% share of the biscuit market, emerging from nowhere. The loss in market share is reflecting on the biscuit giant's bottom line too. Britannia's net profit for the financial year 2005-06 came down to Rs. 146.43 cr from Rs. 148.77 cr a year ago. Although the fall is a meager 2%, s attribute the decline to the lack of a groundbreaking product innovation after the launch of "Tiger" long ago. Another reason for the waning profits is the defensive posture of the company in the face of rising competition, although the new regime denies it vehemently. Nevertheless, it wouldn't be anything short of a mammoth task for the new management under the new CEO to bring back the company to its heyday.
Things were not as worse even a few years ago. Venturing into new areas and successive product innovation once symbolized Britannia as a "Super brand". Moreover, Britannia was the first brand to associate the idea of health with biscuit by its highly successful promotional campaign "Eat Healthy, Think Better". However, of late, with the entry of new competitors on the scene, the pioneer is feeling the heat. The latest financial report if necessitates anything, is an immediate action. The growth rate of operating profits has come down to a mere 7% in 2005-06 when compared to 12% of the previous year-new products like Marie Gold Double and Treat Duet have not boosted sales in any significant amount. |
