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Oreo, Sunfeast bite into Britannia mkt pie
The Times of India - 19 Dec 2011

The Rs 3,600-crore premium cream biscuit market has turned hyper competitive with Cadbury’s Oreo and ITC’s Sunfeast brands biting into the share of Britannia Industries, and Parle Products planning to enter super-premium creams.

The numbers reveal how Oreo and Sunfeast (Dark Fantasy, Dream Cream and Premium Cream) creamed Britannia to garner shares of 6% and 10.6%, respectively during January to September 2011. The Sunfeast portfolio gained the most with 7% jump in value share. Britannia’s combined value share of the premium cream biscuit portfolio (Bourbon and Treat) declined from 18% in January to 14.7% in September, as per Nielsen data available with TOI. This has narrowed the share gap in premium creams between Britannia and ITC.

“The cream category contributes less than 20% to the overall Britannia business. However, in the recent past key brands like Bourbon and Treat have found much stronger traction and appeal with consumers and have grown faster than the overall biscuit market. Bourbon, in fact, has almost doubled and held on to its share of 9% year-todate (9.2% last year),” said a Britannia spokesperson.

“Competitive activity has also been there in different categories including a high decibel launch of Oreo which has a share of 1 % in the biscuit market year to date,” the Britannia spokesperson said, adding, “with innovative and superior consumer delivery, Britannia creams will sustain pricing.”

Oreo, which was launched early this year, is said to have clocked in sales on the back of high consumer spends, which went up by 51% in the second quarter ended September 30 this year as compared to the first quarter. ITC investments behind Sunfeast premium cream biscuits were even higher at 114% in the last two sequential quarters. In contrast, Britannia’s spends on the premium cream biscuits increased just 6%.

Oreo hit the market with an aggressive introductory offer of Rs 10 per pack, a level most Indian households can afford to splurge on. Cadbury India, which is now owned by Kraft, adopted a strategy to drive awareness and rapid trials. “We reached out to consumers across 14 cities through our ‘Oreo Togetherness’ campaign. We also leveraged the digital medium in a big way,” said Chandramouli Venkatesan, director, snacking and strategy, Cadbury India. Oreo’s price was gradually upped to Rs 12 based on the consumer response.

ITC too upped the ante with its premium range of cream offerings receiving “positive response from consumers with sales volumes recording impressive growth”, according to Chitranjan Dar, divisional chief executive, ITC Foods division.

Now, Parle Products, the largest domestic biscuit maker, plans to enter the super-premium cream segment. “In premium cream biscuits, our Hide & Seek Bourbon is already garnering good market share. So while we clearly dominate the Rs 5 cream biscuit segment as also the mid-range one, we’re getting good foothold in premium and will also target a super-premium space with innovative products,” said Arup Chauhan, executive director, Parle Products.

Britannia said its Treat portfolio has a higher than biscuit category CAGR for the last 3years, with 7.7% share within the creams category, on the back of innovations.

“Treat today commands a premium in the market place and we will explore ways of maintaining it,” said the Britannia spokesperson.

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