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Unibic makes a dent in the cookie segment

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MUMBAI: Premium cookies, which were once seen as a product only for elite consumers, have now become accessible to everyone. As a result, the biscuits and cookies industry in India has been expanding at a compound annual growth rate (CAGR) of 10 per cent in the last three years and is currently valued at Rs 145 billion.

India is currently the world’s largest biscuit-consuming nation and the industry is expected to grow at a CAGR of 14 per cent by the end of 2019. The biscuit segment is projected to be worth approximately Rs 279 billion.

In 2015, the cookie category accounted for the largest share in the country’s biscuits market and was closely followed by plain biscuits and sandwich biscuits. The western region and metro cities are the largest markets for biscuits in India as consumers with higher disposable income don’t mind spending more on consumables such as biscuits.

In 2015 and 2016, the cookie segment, which includes brands such as Unibic, Bournvita Biscuits, Britannia Good Day and Parle Platina, witnessed a rising number of urban consumers and working population that helped in boosting the sale for the segment.

According to a research conducted by 6Wresearch, the India biscuit market stood at $3.9 billion in 2016, and is projected to grow to $8.2 billion by 2023. In terms of centre-filled biscuits, the segment is majorly dominated by the urban population. Further, non-premium biscuits accounted for majority of the revenue share in 2016. Nevertheless, premium biscuits are gaining huge acceptance in tier-I and II cities.

Bengaluru-based premium cookie maker Unibic Foods has become a recent favourite for most urban consumers that are looking for a premium cookie and what has worked for the brand, is the power of word of mouth. With a strong presence in the southern market, Unibic is actively working towards making a strong foothold in the northern belt.

The biscuits market today is 80 per cent organised with localised players dominating the regional markets. Unibic Foods head of marketing Aarti Iyer says, “The northern market is a heavy cookie consumption market and we see huge potential there. Although there are local players who are pretty strong in those markets, our focus will be to make sure all our variants are available in the North and not just selective products.”

Unibic had actor singer Shruti Hassan as its brand ambassador for over a year but eventually decided to end the contact and now has a mascot, called UBU. Although the company used Hassan for most of the advertising in southern market, she was limited to only few ads up in the North. Now with an increased focus on marketing and advertising, Unibic is looking at strengthening its position in North India while not overlooking its primary south market.

East and North India have the highest consumption of biscuits and cookies in the country. Iyer also mentioned that Unibic is looking at investing in Northeast India where they will be pushing in some strategy and plans to tap into the market.

The cookies and biscuits market is worth Rs 6000 to 6500 crore today. The top four players in the market for biscuits and cookies today are Parle Products, Britannia, ITC and Surya Foods and Agro, where both Britannia and Parle account for 61 per cent share of the market. But Unibic is gradually stepping into the race by introducing its large variety of cookies for the Indian consumer. The company’s turnover stood at Rs 60 crore by 2010 and has been growing at a CAGR of 50 per cent. In 2017, Unibic added its fifth manufacturing facility with an investment of Rs 12 crore, which will take its capacity to 100 tonnes a day.

Rather than following the conventional ‘one for all’ marketing strategy, Unibic plays to its strength in each market along with the market conditions and consumption patterns. Iyer adds, “Our marketing varies region to region. On one hand, for a cosmopolitan city like Bangalore, it is a blend of TV, outdoor and digital because the consumption of media here is very different from other smaller areas. On the other hand, Tamil Nadu has a high consumption of TV content so it makes more sense to invest in it there rather than on digital and OOH. Similarly, in the Northeast, the local channels are big and so we invest there.”

The cookie brand relies heavily on television for its advertising follows by digital and OOH. Iyer says, “TV still holds the biggest chunk of our advertising and will remain our core focus, but digital is something that we are going to go a little stronger now, not just in terms of social media to create brand affinity but also in term of digital space as such.” In the South, Unibic advertises on GEC, youth and music channels. Although it hasn’t advertised as such in the North, it wants to focus on kids channel, lifestyle and GEC channels to target the urban north market.

Unibic does not undertake any print campaigns and wants to stay away from the medium.

Healthy snacking category is a very niche territory in India and though people are conscious about what they want to eat, it’s only a small majority that focuses on eating right all the time throughout the day. The company launched snack bars in 2017 in key metros and mini metros across India which has helped the brand in targeting the desired target audience and profile for the product.

According to the company, Delhi, Bangalore, Cochin and Chennai have been its major markets for snack bars. Unibic doesn’t want to restrict itself to the health segment but is rather looking at it as a healthier snacking option, a category which is predominantly ruled by localised products with higher calories. Iyer makes it clear that they don’t want to promote the snack bars as something which is for health-conscious people but more so as a snacking option for every Indian. Additionally, a healthy snack could possibly be in the pipeline for Unibic.

The company exports to 10 counties including US, UK, Australia, Singapore, Europe, Nepal and Bhutan. The products have been well received in Nepal and Bhutan but the other markets are still underserved.

Although glucose biscuits account for about 25 per cent share in the industry, premium biscuits and cookies are moving up the consumption ladder rapidly. Compared to other FMCG products, the penetration of biscuits and cookies is pretty high, with urban area accounting to 94 per cent whereas it stands at 83 per cent in rural areas. Unibic has midrange and basic butter and milk cookies that start as low as Rs 10, but its core focus will be on premium cookies.

While the company has a good portfolio of products and the consumers today have an affinity to premium cookies, Unibic still has a long way to go before it can beat the ITCs and Britannias of the world to capture a substantial chunk of the market.

Also Read :

RAW Pressery working on slow but steady expansion

Kids' candy segment: Communication sees a shift

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Parle launches campaign for new Milano range

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