The Parle-Britannia rivalry is decades old. The duo has consistently tried to maintain one-upmanship against each other until FY13, when Britannia Industries suddenly surged past Parle Products on the back of its premiumisation strategy and a deeper distribution network. Though both the biscuit majors had a successful run through the COVID-19 lockdown in FY21, it is advantage Parle Products. According to a recent report by Edelweiss Research, Parle has significantly narrowed the market share gap and is now neck-to-neck with Britannia.
A bulk of Parle's growth last fiscal has come on the back of its flagship brand, Parle-G. The last one year has seen a considerable amount of down-trading which benefitted Parle-G because of its affordable pricing of Rs 2. In fact, Parle-G was the sought-after brand of several Government agencies and NGOs which bought in bulk to distribute to migrant workers. Apart from its pocket-friendly pricing, the preference for trusted brands during the pandemic also gave Parle-G a distinct advantage. The Edelweiss report says that Parle gained significant market share from smaller players in FY21, which helped to narrow the market share gap with Britannia. In FY18, Britannia had a 30.8 per cent share and Parle was neck-to-neck at 29.1 per cent. Britannia widened this gap by 5 per cent in FY20.
"The pandemic compelled many migrants to return to rural areas last year and due to their propensity to consume trusted but value-end products, this would have benefitted Parle against smaller players. Parle is still way stronger in rural areas of many parts of North India versus Britannia," says the Edelweiss report.
Parle Products' Senior Category Head, Mayank Shah had said that 2020 was a year of phenomenal growth for the biscuit company, which it had not seen in the last 30-40 years.
In fact, Britannia had also re-prioritised its SKUs last year and had focused more on its value brands such as Marie, Milk Bikis and Good Day. Britannia MD, Varun Berry had talked about an 80:20 strategy, wherein he had said that the company would focus on 20 per cent of its portfolio, which churned 80 per cent of its revenue.
Britannia Industries is leaving no stone unturned to maintain its winning run in the Rs 40,000 crore Indian biscuit industry. Not only has it deepened its rural distribution which has traditionally been a stronghold of Parle, Britannia has been particularly targeting North India, where Parle is strong. "Britannia has launched Milk Bikis atta biscuits with tagline of 'Doodh Roti ki Shakti' in Hindi, aiming to appeal to the Hindi belt and northern rural areas," points out the Edelweiss Report.
Britannia currently has 26 per cent share in the milk biscuit category, but it is determined to increase its market share in the milk plus glucose category where it presently holds only 4 per cent share.
The Indian biscuit market size is estimated at Rs 40,000 crore in 2020, representing approximately 5 per cent of the global market. The Indian market is estimated to post CAGR of 9 per cent to Rs 62,000 crore till 2025, as per a Technopak report. This growth will increase India's share in the global market to approximately 6 per cent by 2025.
Britannia clearly has been more aggressive in the past few years. It will be interesting to see if Parle will maintain the current growth momentum.