Sucheta Dalal :Will ITC exit the biscuits segment?
Sucheta Dalal

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Will ITC exit the biscuits segment?  

October 27, 2009

 

There is a rumour in the market that ITC Ltd, the tobacco-to-hotels company, will discontinue its flagship biscuit brand ‘Sunfeast’ due to wafer-thin margins.
 
However, according to industry sources, while the company has been talking of discontinuing its mass-produced biscuit brand since the past eight months, it continues to invest in the same.
 
ITC may be investing around Rs100 crore to Rs125 crore on a brand-building exercise for its food business during this financial year, that includes biscuit brand Sunfeast and snack product Bingo. Like biscuits, ITC is also losing money heavily on its snack food Bingo.
 
Earlier in May, a top company official made a statement in the media that ITC is looking at making a huge investment on brand-building of its flagship brand. “A huge investment is also being planned for brand-building and product development of Sunfeast. At the same time, the company is looking at investments in building trade loyalty across channels and markets,” said Chitranjan Dar, chief operating officer, ITC Foods Division.  
 
Parle-G which is the market leader in the glucose biscuit segment plans to continue with the same low-price strategy. Competitive price scenario has forced other manufacturers like Britannia and ITC to keep the price tag at the same level which is bleeding them, said an analyst.

“Parle-G brought a disciplining factor in the market which did not allow the competition also to increase their prices. They have tried to increase the price but were not successful,” said Mayank Shah, group product manager, Parle Products Pvt Ltd. –Pallabika Ganguly [email protected]

-- Sucheta Dalal



 



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