Home Retail “India’s per capita biscuit consumption is only 2.1kg”

    “India’s per capita biscuit consumption is only 2.1kg”


    It has been fifteen years and Priyagold, the leading brand of biscuit manufacturing company Surya Food & Agro Ltd has managed to hold against the goliaths of the market and has nurtured its national aspiration, with a single mindset of making the company’s product line, a household favorite. From the onset, the founder of the company BP Agarwal focused on the great taste in affordable price formula and decided to position the mass by a remarkable distribution network growth and thriving marketing strategies.

    Presently, Priyagold accounts for 90 per cent of the Rs 4 billion turnover the company clocked in 2008 and has expanded its footprint from its home base of Delhi into most parts of the north — Uttar Pradesh, Haryana, Punjab, Rajasthan — as well as the West. Further, the company hopes that in the near future it will be able to storm the south as well starting with Andhra Pradesh and then moving on to Karnataka and Tamil Nadu.

    After establishing foothold in Biscuit industry, Agarwal continued to adopt a strategy to identify and commercialise profitable growth opportunities by leveraging established brand and distribution network, diversified into manufacturing of fruit juices through another company Surya Fresh Foods. In December 2008, he also diversified into manufacturing of chocolate, toffee and candy through another company Surya Processed Food. In an interaction with IndiaRetailing, Agarwal gives an insight about the cut throat completion with the major players at the retail shelves and his surviving mantra of success.

    IndiaRetailing (IR): How big is India’s biscuit industry? What steps are needed by Indian players to strengthen footholds in global arena of the segment?
    BP Agarwal (BPA): Indian biscuit Industry is the considered as the third largest producer of biscuits after USA and China. It is one of the fastest growing sectors within the food industries and has an estimated turnover of around Rs 65 billion. Biscuit manufacturing in India is huge and is constantly growing at a rate of 12-15 per cent per annum.

    Indian biscuit manufacturers can penetrate into international market in a bigger and bolder way by taking off the excise duties for biscuit products, focusing on quality standards and thereby maintaining them, adhering to world class packaging technique and working upon helpful policies.

    IR: Established in 1993, how has been the journey so far?
    BPA: We began our journey under the banner Surya Food & Agro Ltd. with a single mindset of making the company’s product line a household favorite and we have a seen a tremendous growth in the past 15 years and are growing at the rate of 25 per cent every year.

    Our trademark products Priyagold and Treat have emerged as one of the most powerful brands in FMCG sector. Today, we manufacture 54 varieties of biscuits like Butterbite, Marie, Cheezebits and many more that have already created an appeal and are in great demand. Keeping up with the market’s demand chain, we entered into the beverage market in 2006 and are currently marketing fruit juices. We have imported various world class machinery to ensure that our products reach the customer in a hygienic and with its freshness intact.

    IR: What are your plans for the expansion of your product portfolio this year and further? How do you plan to extend your distribution network?
    BPA: As part of our expansion plan this year, we are diversifying our product portfolio and are launching chocolates, cookies and toffee. We have already invested Rs 300 million for this and have set up state of the art facility at Sidcul, Haridwar for the production of chocolates, cookies and toffee which is spread over an area of 10 acres of land. In chocolates, we are initially launching hard chocolate and wafer coated chocolate.

    We have also set up a new plant in Haridwar for the production of juices in order to expand the capacity of the juice manufacturing. Further to our investment plan, we are planning to set-up a biscuit manufacturing capacity in Hyderabad within next two years to cater to southern market. Moreover, we also plan to upgrade all our existing manufacturing facilities. We are exporting biscuits, fruit juices, fruit drinks to Middle East, South African countries but presently, our contribution of exports to our total revenues accounts for about 4 to 5 per cent, therefore we are rapidly focusing on increasing the same.

    We hope that our new products will add significantly to our revenue during 2009-10 as we are targeting Rs 5 billion turnover mark.

    IR: Who are the major domestic players in the segment? What are factors required to be taken care of by Indian snacks/food stuff including confectionery manufacturers to compete with the foreign manufacturers?
    BPA: There are very limited players in the biscuit manufacturing sector. Parle and Britannia are the market leaders with a market share of 30 per cent each. Some of the imported brands of biscuits are nowadays easily available in the market. But still Indian manufacturers have not been affected at large the reason being the price disparity. Also, innovation is the key to survival for the companies. Our Indian domestic market is large and continuously expanding and can accommodate players like us and other foreign manufacturers also.

    IR: Are you planning marketing initiatives to boom the sale?
    BPA: On the marketing front, since we are announcing our new product launches, we are set to come out with multi-media campaigns which will include television commercials, radio advertising and print advertising. It will not only make the potential customer aware of the products and services we are offering but also help in influencing the purchasing decision of our customers. It will also create immense brand recall value of our products.

    On the pricing strategy, we have opted for competitive prices to gain a leading edge over our competitors since our objective is to provide products at affordable prices without compromising on the quality of the products.

    Further, we are constantly undertaking market surveys before the introduction of any new product in the market to seek the information regarding the consumer preference of our products and will continue to invest on our brands and market infrastructure and build on competencies of our team.

    IR: Which markets do you find more fruitful – domestic market or exporting to international markets?
    BPA: The international market is a platform for players of varied spheres to export and transact with the international business community. Although the market for biscuits in India is growing at a very steady rate of 12-15 per cent per annum, the per capita consumption in our country is only 2.1 kg per annum, compared to more than 10 kg in the USA, UK and Western European countries. Therefore, we cannot ignore our Indian domestic market, as it is large and continuously expanding. For us both international and Indian markets are important for the growth of our industry.

    IR: Which are the potential export markets?
    BPA: Our main target markets are in UAE, Afghanistan, Pakistan, USA, European Countries, East Asian countries. Our quality products are in great demand in all these above named markets. Presently, we are exporting biscuits, fruit juices, fruit drinks to Middle East, South African countries and receiving offers from other Asian countries. Presently our contribution of exports to our total revenues accounts for about 4-5 per cent but we are rapidly focusing on increasing the same. We need to regularly work on the quality and price aspect to cater to the competitive global market.