Parle compacts market share gap with competitor Britannia

Mayank Shah, Senior Category Head, Parle stated that 2020 was a year of phenomenal growth for the biscuit company, which it had not seen in the last 30-40 years.

The competition between Parle-Britannia is decades old. The duo has consistently tried to maintain one-upmanship against each other until FY13, when Britannia Industries suddenly swept past Parle Products on the back of its premium strategy and strong distribution network. Though both the biscuit majors had a successful run through the COVID-19 lockdown in FY21, it was an advantage to Parle Products. According to a recent report, Parle has significantly narrowed the market share gap and is now in close competition with Britannia.

The main vastness behind Parle's growth comes from 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 low-cost pricing of 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. Due to 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 industries. In FY18, Britannia had a 30.8 percent share and Parle was neck-to-neck at 29.1 percent. Britannia widened this gap by 5 percent in FY20.

The report states, "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.”

However, Britannia had emphasized its Stock Keeping Units(SKUs) last year and had focused more on its value-added brands such as Marie, Milk Bikis, and Good Day. Varun Berry, Britannia MD, had stated about an 80:20 strategy, wherein the company would focus on 20 percent of its portfolio, which churned 80 percent of its revenue.

Britannia Industries has been constantly trying to maintain its winning run in the 40,000 crores Indian biscuit industry. Not only has it deepened its rural distribution which has traditionally been an iron grip of Parle, but Britannia has also been particularly targeting North India, where Parle is strong.

"Britannia has launched Milk Bikis atta biscuits with a tagline of 'Doodh Roti ki Shakti' in Hindi, aiming to appeal to the Hindi belt and northern rural areas," report added.

Britannia currently has a 26 percent share in the milk biscuit category, but it is resolute to increase its market share in the milk plus glucose category where it presently holds a 4 percent share only.

The Indian biscuit market size is estimated at 40,000 crores in 2020, indicating approximately 5 percent of the global market. The Indian market is estimated to post a Compound annual growth rate (CAGR) of 9 percent to 62,000 crores by 2025. This growth will increase India's share in the global market to approximately 6 percent by 2025.

Britannia industries are determined and working towards a hostile growth in the past few years and if Parle will maintain the current growth momentum it would definitely be an attention-grabbing piece of evidence.