Britannia Biscuit Research Paper Essay

Britannia -the ‘biscuit’ leader with a history-has withstood the tests of time. Part of the reason for its success has been its ability to resonate with the changes in consumer needs-needs that have varied significantly across its 100+ year epoch. With consumer democracy reaching new levels, the one common thread to emerge in recent times has been the shift in lifestyles and a corresponding awareness of health. People are increasingly becoming conscious of dietary care and its correlation to wellness and matching the new pace to their lives with improved nutritional and dietary habits. This new awareness has seen consumers seeking foods that complement their lifestyles while offering convenience, variety and economy, over and above health and nutrition. Britannia saw the writing on the wall. Its â€Å"Swasth Khao Tan Man Jagao† (Eat Healthy, Think Better) re-position directly addressed this new trend by promising the new generation a healthy and nutritious alternative – that was also delightful and tasty. Thus, the new logo was born, encapsulating the core essence of Britannia – healthy, nutritious, and optimistic and combining it with a delightful product range to offer variety and choice to consumers. INTRODUCTION TO THE INDUSTRY BISCUIT INDUSTRY IN INDIA – AN OVERVIEW âž ¢ Biscuit industry in India in the organized sector produces around 60% of the total production, the balance 40% being contributed by the unorganized bakeries. The industry consists of two large scale manufacturers, around 50 medium scale brands and small scale units ranging up to 2500 units in the country, as at 2000-01. The unorganized sector is estimated to have approximately 30,000 small & tiny bakeries across the country. âž ¢ The annual turnover of the organized sector of the biscuit manufacturers (as at 2001-02) is Rs. 4,350 crores. âž ¢ In terms of volume biscuit production by the organized segment in 2001-02 is estimated at 1.30 million tonnes. The major Brands of biscuits are – Britannia, Parle Bakeman, Priya Gold,Elite,Cremica, Dukes, Anupam, Horlicks, Craze, Nezone, besides various regional/State brands. âž ¢ Biscuit industry which was till then reserved in the SSI Sector, was unreserved in 1997-98, in accordance with the Govt. Policy, based on the recommendations of the Abid Hussain Committee. âž ¢ The annual production of biscuit in the organized sector, continues to be predominantly in the small and medium sale sector before and after de-reservation. The annual production was around 7.4 Lakh tonnes in 1997-98 in the next five years, biscuit production witnessed an annual growth of 10% to 12%, up to 1999-00. âž ¢ The annual Growth showed a decline of 3.5% in 2000-01, mainly due to 100% hike in Central Excise Duty (from 9% to 16%). Production in the year 2001-02 increased very marginally by 2.75% where in 2002-03 the growth is around 3%. âž ¢ The Union Budget for 2003-04 granted 50% reduction in the rate of Excise Duty on Biscuit i.e. from 16% to 8%. The Federation’s estimate for the current year indicates a growth of approximately 8% to 9%. âž ¢ However the average utilization of installed capacity by biscuit manufacturers in the country has been a dismal 60% over the last decade up to 2001-02. âž ¢ Though dereservation resulted in a few MNCs, i.e. Sara Lee, Kellogs SmithKline Beecham, Heinz etc entering the biscuit industry in India, most of them, with the exception of SmithKline Beecham (Horlicks Biscuits), have ceased production in the country. âž ¢ On the other hand, import of biscuits, especially in the high price segment has started from 1998-99, but however, the quantum of imports has not so far increased alarmingly and has remained at around 3.75% of the consumption of biscuits in the country in the year 2001-02. However, recent imports from china industries cheaper verities of biscuit, needs to be examined with cautions, especially in the context of the price as the low margin based domestic industry, which is operating at 60 % of the total installed capital. Exports of biscuits from India have been to the extent of 5.5% of the total production. Exports are expected to grow only in the year 2003-04 and beyond. âž ¢ Biscuit is a hygienically packaged nutritious snack food available at very competitive prices, volumes and different tastes. According to the NCAER Study, biscuit is predominantly consumed by people from the lower strata of society, particularly children in both rural and urban areas with an average monthly income of Rs. 750.00. âž ¢ Biscuit can he broadly categorized into the following segments: (Based on productions of 2000-01) Glucose 44% Marie 13% Cream 10% Crackers 13% Milk 12% Others 8%. âž ¢ . FBMI ( Federation of Biscuit Manufacturer’s of India ) is an association of all the biscuit manufacturers of India. Major players include Britannia, Parle, ITC, Priyagold, Windsor etc. âž ¢ In recognition of industry’s obligations towards the community, being a part of it, biscuit manufacturers supply biscuits to the social welfare agencies in all States for the benefit of school children, senior citizens and other needy sections of the society. FBMI ( Federation of Biscuit Manufacturer’s of India ) Members have always responded positively to our appeal as also by the Government, to rush truck loads of biscuits to the people affected by earthquakes, floods, famine etc. These members have also participated in supplying biscuits to the people of war ravaged Afghanistan and presently to the Iraqi people, under the aegis of the UN. âž ¢ As regards the consumption pattern is concerned. surveys and estimates by industry from time to time indicate the avera ge consumption scenario in the four Zones have been more or less close to each other, as below: 1. Northern States: 28% 2. Southern States: 24% 3. Western States: 25% 4. Eastern States: 23% [pic] âž ¢ Though India is considered as the third largest producer of Biscuits after USA and China, the per capita consumption of biscuits in our country is only 2.1 Kg., compared to more than 10 kg in the USA, UK and West European countries and above 4.25 kg in south cast Asian countries, Le. Singapore, Hong Kong, Thailand, Indonesia etc. China has a per capita consumption of 1.90 kg, while in the case of Japan it is estimated at 7.5 kg. âž ¢ In view of the meager per capita consumption even as penetration of biscuits manufactured by the organised sector, into rural areas in India, has been very good during the last 10 years, as also in the metro and other cities, small towns etc. However, in spite of this, the industry has not been able to utilize about half of their installed capacities. âž ¢ Biscuit is a comparatively low margin food product in the PMCG (Packaged Mass Consumption Goods) sector. The commodity is also price sensitive, as a consequence of which, even when the Excise Duty was doubled on biscuits in 2000-01 biscuit manufacturers, including the major brands, were not able hike MRPs to the extend of the steep increase in the Duty. Taxation, both Central Excise Duty as also State Sales Tax, other miscellaneous levies i.e. turnover tax, local area tax, mandi taxes, purchase tax, Octroi etc., has been a major deterrent in the growth of the biscuit industry. The CII Study Report has identified Biscuit as one of the products that should treated as â€Å"Merit Good for the purpose of liberal tax policy both by the Centre and States. âž ¢ Besides lack of technology upgradation in manufacturing, packaging etc has also been a factor affecting our industry, along with inadequate financial credit and support particularly for the medium and small scale biscuit un its. âž ¢ On the other hand, the Government of India has identified food processing industries as a priority area to be encouraged for growth and development and created the Ministry of Food Processing Industries (which was till then a Dept in the Ministry of Agriculture), headed by an Ministry of State with Independent charge. âž ¢ Biscuit manufacturing as well as other bakery products like Bread etc are agro based industries, with the major inputs – wheat flour/atta sugar, milk vanaspati/vegetable oil etc all being agriculture produces. âž ¢ Industries such as Biscuit are also languishing as they are not able to achieve their potentials for higher production, in the absence of the concrete food Processing Industry Policy. FBMI in close coordination with other organizations and apex Chambers, initiated to urge the Govt of India to formulate a comprehensive Policy Document, for smooth growth and harmonious development of the industry. The Food Processing Industry Policy, which has been evolved as a result of various workshops, deliberations and representations by a large cross section of food processing industries, is yet to be finalized. It is hoped that the Ministry of Food Processing Industries, GOI would initiate action for implementation of the Policy expeditiously. âž ¢ According to the production figures of members available upto the calendar year 2003, the total production was 625000 tonnes as against 475000 tonnes in the previous year. The production of biscuit for the last 11 years is as under: âž ¢ 1993 – 167750 1994 – 180526 1995 – 202567 1996 – 222371 1997 – 362000 1998 – 400000 1999 – 425000 2000 – 450000 2001 – 465000 2002 – 475000 2003 – 625000 Note: the production of members of FBMI consist of 50% (approx.) of the total production of biscuit in the organized sector. INTRODUCTION TO THE COMPANY HISTORY The story of one of India’s favourite brands reads almost like a fairy tale. Once upon a time, in 1892 to be precise, a biscuit company was started in a nondescript house in Calcutta (now Kolkata) with an initial investment of Rs. 295. The company we all know as Britannia today. The beginnings might have been humble-the dreams were anything but. By 1910, with the advent of electricity, Britannia mechanized its operations, and in 1921, it became the first company east of the Suez Canal to use imported gas ovens. Britannia’s business was flourishing. But, more importantly, Britannia was acquiring a reputation for quality and value. As a result, during the tragic World War II, the Government reposed its trust in Britannia by contracting it to supply large quantities of â€Å"service biscuits† to the armed forces. As time moved on, the biscuit market continued to grow†¦ and Britannia grew along with it. In 1975, the Britannia Biscuit Company took over the distribution of biscuits from Parry’s who till now distributed Britannia biscuits in India. In the subsequent public issue of 1978, Indian shareholding crossed 60%, firmly establishing the Indianness of the firm. The following year, Britannia Biscuit Company was re-christened Britannia Industries Limited (BIL). Four years later in 1983, it crossed the Rs. 100 crores revenue mark. On the operations front, the company was making equally dynamic strides. In 1992, it celebrated its Platinum Jubilee. In 1997, the company unveiled its new corporate identity – â€Å"Eat Healthy, Think Better† – and made its first foray into the dairy products market. In 1999, the â€Å"Britannia Khao, World Cup Jao† promotion further fortified the affinity consumers had with ‘Brand Britannia’. Britannia strode into the 21st Century as one of India’s biggest brands and the pre-eminent food brand of the country. It was equally recognised for its innovative approach to products and marketing: the Lagaan Match was voted India’s most successful promotional activity of the year 2001 while the delicious Britannia 50-50 Maska-Chaska became India’s most successful product launch. In 2002, Britannia’s New Business Division formed a joint venture with Fonterra, the world’s second largest Dairy Company, and Britannia New Zealand Foods Pvt. Ltd. was born. In recognition of its vision and accelerating graph, Forbes Global rated Britannia ‘One amongst the Top 200 Small Companies of the World’, and The Economic Times pegged Britannia India’s 2nd Most Trusted Brand. Today, more than a century after those tentative first steps, Britannia’s fairy tale is not only going strong but blazing new standards, and that miniscule initial Investment has grown by leaps and bounds to crores of rupees in wealth for Britannia’s shareholders. The company’s offerings are spread across the spectrum with products ranging from the healthy and economical Tiger biscuits to the more lifestyle-oriented Milkman Cheese. Having succeeded in garnering the trust of almost one-third of India’s one billion populations and a strong management at the helm means Britannia will continue to dream big on its path of innovation and quality. And millions of consumers will savour the results, happily ever after. HISTORY OF BISCUITS Sweet or salty. Soft or crunchy. Simple or exotic. Everybody loves munching on biscuits, but do they know how biscuits began? The history of biscuits can be traced back to a recipe created by the Roman chef Apicius, in which â€Å"a thick paste of fine wheat flour was boiled and spread out on a plate. When it had dried and hardened it was cut up and then fried until crisp, then served with honey and pepper.† The word ‘Biscuit’ is derived from the Latin words ‘Bis’ (meaning ‘twice’) and ‘Coctus’ (meaning cooked or baked). The word ‘Biscotti’ is also the generic term for cookies in Italian. Back then, biscuits were unleavened, hard and thin wafers which, because of their low water content, were ideal food to store. As people started to explore the globe, biscuits became the ideal traveling food since they stayed fresh for long periods. The seafaring age, thus, witnessed the boom of biscuits when these were sealed in airtight containers to last for months at a time. Hard track biscuits (earliest version of the biscotti and present-day crackers) were part of the staple diet of English and American sailors for many centuries. In fact, the countries which led this seafaring charge, such as those in Western Europe, are the ones where biscuits are most popular even today. Biscotti is said to have been a favorite of Christopher Columbus who discovered America! Making good biscuits is quite an art, and history bears testimony to that. During the 17th and 18th Centuries in Europe, baking was a carefully controlled profession, managed through a series of ‘guilds’ or professional associations. To become a baker, one had to complete years of apprenticeship – working through the ranks of apprentice, journeyman, and finally master baker. Not only this, the amount and quality of biscuits baked were also carefully monitored. The English, Scotch and Dutch immigrants originally brought the first cookies to the United States and they were called teacakes. They were often flavoured with nothing more than the finest butter, sometimes with the addition of a few drops of rose water. Cookies in America were also called by such names as â€Å"jumbles†, â€Å"plunkets† and â€Å"cry babies†. As technology improved during the Industrial Revolution in the 19th century, the price of sugar and flour dropped. Chemical leavening agents, such as baking soda, became available and a profusion of cookie recipes occurred. This led to the development of manufactured cookies. Interestingly, as time has passed and despite more varieties becoming available, the essential ingredients of biscuits haven’t changed – like ‘soft’ wheat flour (which contains less protein than the flour used to bake bread) sugar, and fats, such as butter and oil. Today, though they are known by different names the world over, people agree on one thing – nothing beats the biscuit! Some interesting facts on the origin of other forms of biscuits: The recipe for oval shaped cookies (that are also known as boudoir biscuits, sponge biscuits, sponge fingers, Naples biscuits and Savoy biscuits) has changed little in 900 years and dates back to the house of Savoy in the 11th century France. Peter the Great of Russia seems to have enjoyed an oval-shaped cookie called â€Å"lady fingers† when visiting Louis XV of France. The macaroon – a small round cookie with crisp crust and a soft interior – seems to have originated in an Italian monastery in 1792 during the French Revolution. SPRING-uhr-lee, have been traditional Christmas cookies in Austria and Bavaria for centuries. They are made from a simple egg, flour and sugar dough and are usually rectangular in shape. These cookies are made with a leavening agent called ammonium carbonate and baking ammonia. The inspiration for fortune cookies dates back to the 12th & 13th Centuries, when Chinese soldiers slipped rice paper messages into moon cakes to help co-ordinate their defense against, Mongolian invaders. .